Daily Morning Note – 14 July 2020

PHILLIP SUMMARY

Asian stocks looked set to gain Tuesday as U.S. stock futures moved higher in overnight trading and pointed to gains at the open on Tuesday, as investors eye earnings reports from some of the nation's largest banks. Futures pointed to modest gains in Tokyo and Hong Kong, despite the late sell-off on Wall street as the rising number of coronavirus cases continued to weigh.

BREAKING NEWS

City Developments Ltd (CDL) said it expected the group’s pre-tax profit for the first half this year to reduce "substantially" from a year ago, dragged by its hotel operations segment amid the novel coronavirus pandemic. Based on preliminary estimates, revenue per available room is expected to decline by about 50% to 60% for H1 2020. It added that “The near-term outlook continues to remain highly challenging and uncertain until the pandemic situation abates together with the reopening of international borders,” CDL expects to release its unaudited half-year results in early August.

Ascott Residence Trust’s (ART) distribution per stapled security (DPS) for the six months ended June 30 is expected to fall by 65% to 75% from the 3.43 Singapore cents recorded in the first half of 2019. The stapled group's financial performance is expected to be "adversely impacted" due to the unprecedented disruption brought by the novel coronavirus pandemic, the managers said. The managers of ART said the stapled group has sufficient liquidity to meet its operational needs and financial commitments.

Cromwell European REIT has signed a heads of terms agreement with its sponsor and Stratus Data Centres, to co-invest directly into 50% stakes in two European data centre projects, subject to various milestones. The first project is a two-stage, 100 megawatt (MW) data centre serving London. The six acre (2.4 hectare) site is located on fibre-optic routes in the east of London, and will be powered by renewable energy. Negotiations with potential tenant operators are “well advanced”, and construction is expected to be completed in 2021.

SIA and SilkAir have increased the frequency for existing routes even though they are not adding new destinations in July and August. The group's passenger capacity in July and August will reach about 6% and 7% of its pre-Covid-19 levels respectively. All flights are subject to regulatory approvals, and schedules are subject to changes, the group said.

Singapore Press Holdings (SPH) expects significantly lower operating profit for FY20 ending August 31 than the S$187 million recorded in the year ago period on the back of the ongoing pandemic. Against such a backdrop, it is also expecting a negative outcome for the revaluation of its investment properties as at August 31, 2020. Across its business segments, the media business was hurt the most due to decline in print advertisements. While circulation was up, it would only partially offset the fall in print advertisements, said SPH. It added that the severe Covid-19 impact on advertising revenue, which accounts for most of media's revenue, is expected to persist.

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

TECHNICAL PULSE

Singapore Technologies Engineering Ltd
Analyst: Chua Wei Ren
Recommended Action: Technical SELL
ST Engineering (SGX: S63) recovery is seen to be in a correction as the technical indicate a slowing of the momentum. We expect the stock to resume its sell-off based on the recent technicals

Jardine Strategic Holdings Ltd
Analyst: Chua Wei Ren
Recommended Action: Technical BUY
Jardine Strategic (SGX: J37) has been trading in a range since March 2020. The pro-long range has formed into a 5-wave symmetrical triangle. Based on the technicals, there is further upside

DBS Group Holdings Ltd
Analyst: Chua Wei Ren
Recommended Action: Technical SELL
DBS Group (SGX: S63) has a strong upside and prices edge higher above $23.00, which beat our previous estimated sell-zone at $22.00 region. However, prices came crashing down after prices reversed strongly at $23.58, which also see prices rejects the 200-day moving average. Based on the technicals, DBS will face further downside to the support zone near $20.00 regions

>> Read more technical reports

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: Market Outlook: SG Banking Monthly, SG Bonds Weekly and SG Strategy 3Q20 (with stock picks)
Date: 06 July 2020

For more on Market Outlook

Phillip Research in 3 minutes: #23- Yoma Strategic Holdings; Initiation

For more videos on Phillip in 3 Mins

Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information


Disclaimer
The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.
Confidentiality Note
This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.