Crown Resorts Ltd

CWN Details

Crown has suspended the buy-back of Subordinated Notes until the day after Crown’s full year results are released, scheduled for 4 August 2017. Recently, seventeen current and two former employees of the Crown group were convicted by the Shanghai Baoshan District Court of contraventions of Article 303, Clause 1 and Article 25, Clause 1 of the Criminal Law of the People's Republic of China. Article 303, Clause 1, is that anyone who organizes gambling parties or is engaged in gambling as one's primary business for making profits shall be sentenced to not more than three years of fixed-term imprisonment, detention, or surveillance, and shall be jointly fined; and Article 25, Clause 1, is that a joint crime is an intentional crime committed by two or more persons jointly. 16 of the 19 defendants were fined a total of RMB8.62 million, which converts to approximately AUD1.67 million and the amount was being paid ex gratia by Crown. Of the 16 defendants who were fined, 11 were also sentenced to a period of incarceration of 9 months and 5 to a period of 10 months, with time in detention since 14 October 2016 to be considered for all. The remaining three defendants, who were bailed on 11 November 2016, were not fined or sentenced to a period of incarceration. We maintain a “Hold” recommendation on the stock at the current market price of $12.34


CWN Daily chart; (Source: Thomson Reuters)

National Storage REIT

NSR Details

National Storage REIT (ASX: NSR) has entered into arrangements to acquire a portfolio of three freehold storage centers in the northern suburbs of Brisbane, Queensland. The portfolio comprises the Brendale (a double story drive-through center that comprises 500 units across 3,700 sqm of net lettable area), Lawnton (located on a major arterial road with retail frontage, the center comprises 440 units across 5,700 sqm of net lettable area), and Rothwell (a ranch style center which comprises 850 units across 10,300 sqm of net lettable area), with a large hardstand storage area. The proximity of the Brendale and Lawnton centers provide for Brendale to be operated as a satellite center in an area with limited competition, new residential and commercial/retail developments and a rapidly growing population.

The portfolio is set to be acquired from the Elite Self Storage group for $28 million as a combination of cash and scrip, with the cash portion to be funded from NSR’s debt facility. Stapled securities (which will be subject to an escrow period) will be issued on settlement, which is expected in late June 2017. Investigations undertaken on the vendor’s identity and capacity confirm its ability to transact. We give a “Speculative Buy” recommendation on the stock at the current price of $1.51


NSR Daily chart; (Source: Thomson Reuters)

WAM Capital Limited

WAM Details

Recently, WAM Microcap completed its $154 million capital raising on 15 May 2017, and it will provide shareholders with risk-adjusted returns derived from a portfolio of undervalued growth companies listed on the ASX with a market capitalization of less than $300 million by using Wilson Asset Management’s research-driven and market-driven investment processes. The company’s investment objectives are to deliver a stream of fully franked dividends and capital growth over the medium-to-long term by preserve capital. Further, WAM Capital acquired an unlisted investment company with net assets of approximately $25.5 million by issuing 13,246,376 new WAM Capital shares. The acquisition is expected to benefit existing WAM Capital shareholders by increasing the size of the investment portfolio in a cost-effective manner. We maintain a “Hold” recommendation on the stock at the current price of $2.45


WAM Daily chart; (Source: Thomson Reuters)

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