Daily Morning Note – 13 April 2021

PHILLIP SUMMARY

Wall Street stocks dipped on Monday, edging down from records ahead of a trove of earnings reports and key economic data later in the week. The Dow and S&P 500 finished at records Friday, but analysts said investors are unsure about whether the markets can go much higher, or if the expected US economic recovery is largely priced in. Key data this week includes Tuesday's report on consumer prices as well as March retail sales and housing starts data.

Earnings from JPMorgan Chase and other large banks are expected to be strong, but again there are questions about whether the results are already priced in, said Briefing.com analyst Patrick O'Hare.


BREAKING NEWS

SG News

Two of the world's most powerful money managers are joining forces to build a business on climate-change investing and raise one of the largest venture-capital funds dedicated to carbon-cutting technologies. BlackRock and Singapore's Temasek Holdings formed a new firm, Decarbonization Partners, to take stakes in startups that have the potential to reduce the world's reliance on fossil fuels and meet the goal of zero-carbon emissions in three decades. They're committing a total of US$600 million to the effort, including US$300 million of seed capital for a US$1 billion first fund, and raising the rest from outside investors.

Eagle Hospitality Real Estate Investment Trust (EH-REIT) (SGX: LIW) entered into a sale-and-purchase agreement on April 7 for the sale of one of the 18 hotels in Eagle Hospitality Trust's (EHT) portfolio, DBS Trustee said on Monday. In an exchange filing, DBS Trustee, in its capacity as trustee of EH-REIT, said that the subsidiary entered into the agreement with Lockwood Development Partners for the sale of Crowne Plaza Dallas Near Galleria-Addison (CPDG) property in Texas for US$18 million. The property is a freehold property comprising a four-storey, 428-room hotel located near downtown Dallas and Dallas Fort-Worth International Airport.

Jardine Matheson's (SGX: J36) acquisition of Jardine Strategic (SGX: J37) will proceed as planned, following approval by shareholders of Jardine Strategic at a special general meeting on Monday. The acquisition, which will become effective on April 14, allows for Jardine Matheson to move ahead with its plans to simplify the parent company structure of the group, it said in an exchange filing on Monday. The group noted that a number of shareholders in Jardine Strategic had voted against the acquisition. However, Jardine Matheson added that "a large number of shares" that voted against the resolution were held by investors who were not shareholders at the time of the announcement of the acquisition on March 8.

Tee International's (SGX: M1Z) net loss widened to S$6.4 million for its third quarter ended Feb 28, from a S$4.1 million loss during the same period a year earlier, it said on Monday. The higher net loss came as revenue fell by more than half to S$46.7 million for the three months, from S$100.6 million a year earlier. The company said this was mainly due to substantial completion of a major project and slowdown of project progression due to Covid-19.

International Cement Group (ICG) (SGX: KUO) has announced that its subsidiary Sharcem has entered into a sale and purchase agreement to acquire cement-related assets in Kazakhstan on an "as-is" condition. In an exchange filing on Monday, ICG - a cement producer with operations in Central Asia - said it is acquiring the assets from Kazakhcement and Development Bank of Kazakhstan. The purchase consideration of around 7.07 billion Kazakhstan tenge (S$22.1 million) will be payable in two cash installments. The amount will come from internal sources and third-party financing, ICG said.

US News

Oil prices rose on Monday on optimism over the pace of coronavirus vaccinations in the United States and after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites. Still, crude prices have remained rangebound in the past three weeks, as growing expectations of surging US economic activity are balanced by the slow rate of vaccination in Europe and anticipation of additional supply from Iran in coming months. Brent rose 33 cents to settle at US$63.28 a barrel.

Gold prices fell on Monday, weighed down by surging US Treasury yields and a firmer dollar after better-than-expected US economic data lifted prospects for higher inflation. Spot gold fell 0.3 per cent to US$1,738.12 per ounce by 3.50am GMT. US gold futures were down 0.4 per cent to US$1,737.70 per ounce.

China will not be named as a currency manipulator in Janet Yellen's first semiannual foreign-exchange report, according to people familiar with the matter. The report is due on Thursday. The move allows the U.S. — which was accused of politicizing the report in the Trump era — to sidestep a fresh clash with Beijing. The offshore yuan extended its intraday gain slightly, strengthening around 0.2% to around 6.5462 per dollar.

The European Union faces calls to limit AstraZeneca's (US: AZN) Covid-19 vaccine to the over-60s. Portugal, which holds the rotating presidency of the EU, has written to the bloc’s health ministers proposing a common approach for the shot's use. Concern is mounting that China’s vaccines are less effective than alternatives, raising questions about nations from Brazil to Hungary that are depending on the shots. The weekly death toll in the U.S. rose for the first time since February. And despite warnings, the world's worst-hit Covid region is reopening.

GameStop Corp. (US: GME) fell on Monday, wrapping up its longest losing streak in a year, amid growing skepticism over its long-term potential despite activist Ryan Cohen’s latest efforts to revitalize the company. Shares fell 11% in New York to close at $141.09, their lowest level in more than two weeks, as Reuters reported the video-game retailer is seeking a replacement for the current Chief Executive Officer George Sherman, without naming sources.

Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR

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