Daily Morning Note – 04 May 2018
WEEKLY MARKET OUTLOOK WEBINAR
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RESEARCH REPORT
United Overseas Bank Ltd – Better margins and provisions drove growth
Recommendation: ACCUMULATE (Downgraded), Last Close Price: S$29.58
Target Price: S$31.70 , Analyst: Phillip Research Team
– 1Q18 PATMI exceeded our estimates by 10% due to lower than expected
impairments
– NIM, lower impairments and fee were the key earnings drivers
– Expect special and higher ordinary dividends as CET 1 surged to 14.9%, against
13% comfort level
– We raised our target price to S$31.70 (previously S$29.00) on a higher ROE and
earnings. Nevertheless, our rating has been downgraded to ACCUMULATE due to
the share price performance.
TECHNICAL PULSE
Hi-P Ltd – Daily timeframe – Bullish
– At the end of the 03/05/18, price closed at the daily high at 1.57 resulting in the
formation of a bullish candlestick pattern, hammer with increasing volume signals
a possible reversal higher.
– With the current hammer rejection off the 1.50 psychological round number and
oversold RSI, a near-term bottom at 1.45 might be forming as the bulls target the
1.79 resistance area next followed by 1.86.
For more information and additional disclosures, refer to the link here.
BREAKING NEWS
U.S. stocks ended lower on Thursday. The Dow Jones Industrial Average was up marginally 0.02% to 23,930.83, the S&P 500 lost 0.22% to 2,629.74, and the Nasdaq Composite dropped 0.18% to 7,088.15.
Trade was in focus as a U.S. delegation begins negotiations with their Chinese counterparts on Thursday and Friday in Beijing. Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer are among the U.S. officials participating in the meeting.
The U.S. trade deficit narrowed sharply in March as exports increased to a record high amid a surge in deliveries of commercial aircraft and soybeans. The trade gap dropped 15.2% to US$49bn, the lowest level since September. March’s decline ended six straight monthly increases in the trade deficit.
U.S. factory goods orders rose 1.6%, more than expected in March, boosted by strong demand for transportation equipment and a range of other products, but there are signs that business spending on equipment is slowing.
U.S. has raised concerns with China about its latest militarization of the South China Sea and there will be near-term and long-term consequences.
Xiaomi filed an initial public offering application in Hong Kong. Reports have suggested it could become the largest listing by a Chinese tech company in nearly four years. The Wall Street Journal, citing a source familiar with the matter, reported that Xiaomi was looking to raise at least $10 billion that could value the company at around $100 billion.
Artivision Technologies is entering into a reverse takeover deal to give up a 70% stake in the company in exchange for e-payment and online retail business, Mobile Credit Payment (MC Payment).
Nippecraft has received an in-principal approval from the Singapore Exchange to transfer the company’s listing from the SGX mainboard to the Catalist board.
Nordic Group has secured about S$6.1mn of contracts due to be completed between the second quarter of 2018 and the end of 2020.
MyRepublic will now be a mobile virtual network operator (MVNO), through a freshly inked partnership with StarHub.
OUE Lippo Healthcare expects to report a net loss for the first quarter ended March 31. The loss is attributable mainly to operating costs.
Source: Bloomberg, Channel NewsAsia, The Business Times, SGX Masnet, Reuters, PSR
Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research
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