In the U.S.:
- February flash manufacturing PMI dipped to 50.8 versus January’s 51.9 reading. Fears over the coronavirus in China seemed to have stifled demand.
- In earnings, 439 companies in the S&P 500 Index have reported, 74.8% beat, 0.9% were in-line, and 24.3% missed estimates.
A consortium consisting of Authentic Brands Group (ABG), Simon Property Group (SPG), and Brookfield Property Partners (BPY) completed the acquisition of Forever 21 for $81M. The move is seen as a shift in strategy as mall operators double down on a retail recovery. In REIT earnings, 80 companies in the Wilshire U.S. REIT Index have reported, 53 beat, 5 were inline, and 22 missed estimates.
- The PBOC lowered the one-year loan prime rate (LPR) by 10bp to 4.05%. The rate cut was expected after the medium-term lending facility (MLF) rate was lowered 10bp earlier this week.
- The Washington Post noted uncertainty around whether China would fulfil its commitment to purchase ~$40B in US agricultural products this year as part of the “phase one” trade deal. USDA chief economist Robert Johansson projected US agricultural exports to China would reach only ~$14B in the year ending 30-Sep.
- January manufacturing PMI fell to 47.6 versus January’s 48.8 reading. The disappointing PMI was the tenth straight month in contraction and weakest reading since December 2012.
Hongkong Land Holdings announced the purchase of a 23.1 hectare mixed-use site in Shanghai for approximately $4.4 billion from the government via auction. The site is located in the West Bund district of Shanghai.
- February Eurozone flash manufacturing PMI increased to 49.1 from 47.9 in January. The boost came from better than expected results from the German manufacturing sector.
- February UK flash manufacturing PMI improved to 51.9 from 50.0 in January. The better than expected result was most likely due to less uncertainty regarding Brexit.
UK listed logistics REIT SEGRO Plc reported its FY19 results with Adjusted EPS of 24.4 pence/sh that was roughly in line with expectations. Like-for-like (LFL) Net Rental Income increased 4.7% for the year, 5.7% in the UK and 3.1% in Continental Europe (CE). Portfolio values increased 2.5% on a LFL basis in the UK and 13.5% in CE. Rental increases averaged 17.8% for the year on rent reviews and renewals and the portfolio ended the year with a vacancy of 4.0%. It was a record year for development completions with 40 projects completed that delivered 872k sqm (9.4 mn sf) that are currently 92% leased with a projected 7.3% average yield on cost. The company continues to maintain a strong current pipeline of developments with 46 projects currently under way that will deliver 826k sqm (8.9 mn sf). The projects are currently 60% preleased and are projected to deliver an average yield on cost of 6.6%. The balance sheet remains well positioned to continue to support its development activities with a year end LTV of 24%.
The views expressed in this update are as of the date of this blog entry. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The adviser disclaims any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies’ securities should not be regarded as investment recommendations or indicative of the Adelante products, strategies, or portfolios.