Daily Morning Note – 08 June 2018


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Land Transport Sector – Industry restructuring and levelling the playing field for Taxis
Recommendation: OVERWEIGHT (Maintained), Analyst: Richard Leow
– Taxi population still contracting, and rental cars YoY growth continues to
– Deadline for attending training and passing the test approaching, yet 40% of
drivers have not attained their PDVLs
– Maintain Overweight on the Land Transport Sector, on the positive industry
restructuring and regulatory action coming into effect which levels the playing
– Maintain Accumulate on ComfortDelGro; higher target price of $2.69
(previously $2.48)

ComfortDelGro Corp Ltd – Demand for Taxis is returning
Recommendation: Accumulate (Maintained)
Last Close Price: $2.46
Target Price: $2.69 (previously $2.48)
Analyst: Richard Leow
– The worst appears to be over for Taxi business, signalled by growth in
bookings and capex for new hybrid taxis
– Termination of strategic agreement with Uber’s LCR
– Outlook for Rail is positive, with narrowing of DTL losses driven by ridership
– Maintain Accumulate; higher target price of $2.69 (previously $2.48)


Haw Par Ltd – Daily timeframe – Bullish
– The bullish follow through since 30/05/18 succeeded in breaking price above
the downtrend line and 20 day moving average on 05/06/18 signals the
resumption of the uptrend.
– Expect price to head higher next to test the 14.00 resistance area followed by
14.20. The 30/05/18 low of 12.82 should be the next higher low (HL) point for
this uptrend.

For more information and additional disclosures, refer to the link here.


The Dow Jones Industrial Average DJIA, +0.38% rose 95 points, or 0.4%, to 25,241.41, with about two-thirds of the blue-chip companies finishing higher. The S&P 500 SPX, -0.07% ended 1.98 points, or 0.1%, lower at 2,770.37, breaking a four-day winning streak. The Nasdaq Composite Index COMP, -0.70% which briefly traded in positive territory and set an all-time high, sank 54.17 points to 7,635, a decline of 0.7%.

US weekly jobless claims drop as labour market picks up steam. Initial claims for state unemployment benefits fell 1,000 to a seasonally adjusted 222,000 for the week ended June 2, the Labor Department said on Thursday. Economists polled by Reuters had forecast claims rising to 225,000 in the latest week.

US reaches deal with China’s ZTE that includes US$1b fine. Under the deal, ZTE will change its board and management within 30 days, pay a US$1 billion fine, put US$400 million in escrow and retain a new US-selected compliance team

Brent crude futures settled up $1.96 a barrel, or 2.6 percent at $77.32. U.S. West Texas Intermediate (WTI) crude rose $1.22, or 1.88 percent to $65.95 a barrel. Crude prices got an early lift on concerns about exports from Venezuela. Gains grew when Algeria’s oil minister indicated OPEC would focus on balancing the market rather than on rolling back production caps.

SembMarine to buy Sevan Marine’s intellectual property in US$28m deal to end legal dispute. The litigation between SCM Group and Sevan Marine in the US courts over the infringement of intellectual property rights of SCM Group will be terminated subject to completion.

Wilmar, OCBC ink deal to peg interest rate on US$200m loan to sustainability performance. Interests rates on Wilmar’s loan will be reduced on a tiered basis if the company achieves its pre-set sustainability targets, which are based off environmental, social and governance (ESG) metrics.

Citic Envirotech secures 1b yuan environmental project in Anyang City. To undertake the project, Citic and its partner in the project – Fengzhu Textile Technology – will set up a project company with shareholdings of 90 per cent and 10 per cent respectively.

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

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

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

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