Daily Briefing: Malaysian PM says HSR on hold due to lack of funds; Parent company offers to make Wheelock shares private for $598m

And here's why the STI could be a casualty in the US-China trade wars.

From iCompare Loan:

Malaysian Prime Minister Dr. Mahathir Mohamad revealed that the High-Speed Rail (HSR) project is on hold as the government's fund could be short for the project cost valued at RMB110b ($37b).

The Malaysian Finance Minister, Lim Eng Guan, had earlier said that the “Kuala Lumpur-Singapore high-speed rail can be “so much cheaper (and that) if the financial architecture is done right, it doesn’t need to cost so much.

“At the moment, we don’t have the funds. So if need be, we will put the project on hold,” Mohamad told reporters outside the Malaysian Parliament. He added that his Government would send Malaysian Economic Affairs Minister Mohamed Azmin Ali to renegotiate the project with Singapore.

Mr Azmin said that the overall cost of the project stood at RM110b ($37b), not between RM54b($18b) and RM74b ($25b) as projected by the previous government. He said this was because the Najib Razak’s administration had not included the hidden costs in the project estimation.

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From Bloomberg:

Hongkong-listed Wheelock & Co. offered to make its Singapore property firm Wheelock private for $598m, bringing its stock to a peak in more than eight years.

“The offer for Wheelock is likely to re-start market talk and expectation of more privatization or M&A,” said Carmen Lee, head of research at Oversea-Chinese Banking Corp. “The current market weakness for property stocks is an opportune time for the key shareholder to take the company private.”

Now, analysts say that parent companies of Wheelock’s peers including Wing Tai Holdings Ltd., Ho Bee Land Ltd., Bukit Sembawang Estates Ltd. and GuocoLand Ltd. may follow suit. And shares of both Wing Tai and Ho Bee Land rose by more than 2% Wednesday."

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From The Motley Fool:

The continued increase in US interest rates could drive Singapore interest rates higher, which in turn could hurt bank stocks that have already fallen by as much as 20% since May.

"At home, Singapore’s Straits Times Index (SGX: ^STI) sunk to a 14-month low earlier this month.

Right now, the Straits Times Index’s PE ratio is around 10. For context, the Straits Times Index’s long-term historical average PE ratio is 16.9.

Real estate investment trusts, a favourite amongst local investors, have also been hit by the recent stock market turmoil. Careful evaluation of REITs with viable properties may turn up buying opportunities."

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