Stocks’ Details
 

National Storage REIT

Raising fund through Security Purchase Plan:National Storage REIT (ASX: NSR) has offered the eligible shareholders the opportunity to participate in a Security Purchase Plan (SPP), which will allow the investors to potentially contribute up to A$15,000 in applying for fully paid ordinary stapled securities in NSR. The offer has opened on 9 January 2018. Recently, NSR had raised A$50 million through a Placement. The company is raising fund through SPP and the Placement, in order to reduce the existing debt and to provide NSR with the financial flexibility to pursue acquisition opportunities or other actions in line with NSR’s stated business strategy. Given the trading scenario with a very high price to earnings ratio while the group has been a high dividend payer with more potential expected to pour in this year as well, we have a “Hold” recommendation on the stock at the current price of $1.535
 

Arena REIT

Dividend Distribution: Arena REIT (ASX: ARF) for the six months ending 31 December 2017, indicated for an expected 3.4% uplift in the portfolio value to $22.2 million. During the period, the expected completion of 11 Early Learning Centre (ELC) development project is for a total cost of $68 million at an average yield on cost of 6.8%. Moreover, in July 2017 the company had announced $65 million development portfolio acquisition which was funded through $55 million equity placement and $10 million through Security Purchase Plan. Additionally, the company has 18 projects in pipeline out of which 17 are expected to be completed in FY18 and one project in FY19. Meanwhile, ARF stock has risen by a mere 3.18% in three months as on January 8, 2018 and announced a distribution is in line with ARF’s previous announcement for FY18 distribution guidance of 12.8 cents per security. Looking at the trading scenario and prospects already captured in the price, we give an “Expensive” recommendation on the stock at the current price of $2.25
 

Portfolio Revaluation (Source: Company Reports)
 

QBE Insurance Group Ltd

Settlement of the shareholder class action proceedings:QBE Insurance Group Ltd (ASX: QBE) had reached an agreement to settle the shareholder class action proceedings started by Money Max Int Pty Ltd on 9 September 2015 in the Federal Court of Australia. This is on behalf of a group of shareholders who acquired an interest in QBE securities between 20 August 2013 and 6 December 2013. The company had agreed to pay A$132.5 million in full and final settlement of the proceedings including interest and the applicant’s costs. On the other hand, QBE has completed the redemption of USD 2.4% Senior Notes due 1 May 2018. Earlier this year, the group was hit by claims owing to natural calamities. We are currently bearish on the stock and wait for any potential upside indicator. The stock looks “Expensive” at the current price of $10.54
 

Sydney Airport

Co-company secretary has resigned: Sydney Airport (ASX: SYD) co-company secretary of The Trust Company (Sydney Airport) Limited, the responsible entity of Sydney Airport Trust 1, Glenda Charles has resigned. On the other hand, SYD in November had posted 7.1% growth in the international passengers and 3.1% growth in the domestic passengers compared with the prior corresponding period (pcp). The total number of passengers had grown 4.5% compared with the pcp. The international growth was due to a strong 4.6% increase in seat capacity and 1.7 percentage point increase in load factors. The domestic also grew due to a strong performance from both seat capacity and load factors. Moreover, Chinese, Indian, South Korean, American and German, which are SYD’s top five foreign growth nationalities, have all contributed to strong growth, with a combined double-digit growth in visitation. Additionally, SYD had welcomed China Airlines’ new A350-900 double daily product from Taipei. The new product is expected to add approximately 200,000 seats annually and boost an estimated additional $48 million in annual visitor expenditure for NSW. Further, the commencement of Qantas’ new direct SydneyOsaka service, which is a new route for the airport has also been seen in positive light. However, the price to earnings ratio and trading level is high at present. Further, the earnings retention rate has been slipping over the last few years. We give an “Expensive” recommendation on the stock at the current price of $7.08
 

Sydney Airport Traffic Performance November 2017 (Source: Company Reports)

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