Daily Morning Note – 09 May 2018

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RESEARCH REPORT

Sembcorp Industries Ltd – Expecting a turnaround in India operation
Recommendation: BUY (Upgraded), Last Done Price: S$3.06
Target Price: S$3.83, Analyst: Chen Guangzhi
– Marine segment continued to weaken the group’s profitability.
– Utilities’ China operation was benefited by seasonality.
– Utilities’ India’s performance was negatively impacted by SGPL and SGIL.
– Marine segment continued to weaken the group’s profitability.

Oversea-Chinese Banking Corp – Provisions vanished this quarter
Recommendation: ACCUMULATE (Downgraded), Last Close Price: S$13.17
Target Price: SS$14.90, Analyst: Phillip Research Team
– 1Q18 PATMI was within our expectations. Non-interest income was below our
estimates but this was made up by a collapse in allowances for loans and assets.
– NIM was flat qoq due to Indonesia and trade loans.
– Excluding insurance and allowances, 1Q18 earnings was up 10% YoY.
– We raised our target price to S$14.90 (previously S$13.94) on a higher terminal
growth rate assumption. Nevertheless, our rating has been downgraded to
ACCUMULATE due to the share price performance.


TECHNICAL PULSE

ComfortDelGro Ltd – Daily timeframe – Bullish
– The recent bullish break above the 2.13 neckline on 13/04/18 has validated the
inverted Head and Shoulders pattern suggesting a reversal higher.
– Expect the bullish momentum to resume for price to test the immediate
resistance at 2.41 followed by 2.63.

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

BREAKING NEWS

The Dow Jones Industrial Average ended the session 24,360.21, just a hair above Monday’s close. The broad-based S&P 500 slipped less than 0.1 per cent to 2,671.92, while the tech-rich Nasdaq Composite Index edged higher to 7,266.90.

Oil Rebounds as Trump Dumps Iran Deal, Promises New Sanctions. West Texas Intermediate oil for June delivery slid $1.67 to settle at $69.06 a barrel on the New York Mercantile Exchange. Total volume traded was about 70 percent above the 100-day average. A measure of oil market volatility climbed to the highest level in a week.

Trump abandons ‘defective’ Iran nuclear deal, to revive sanctions. President Donald Trump on Tuesday pulled the United States out of an international nuclear deal with Iran, raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies.

Kim meets Xi for second time in two months. The meeting in the Chinese port city of Dalian near the North Korean border came as Beijing tries to regain a central role in the fast-moving diplomacy that has dramatically eased tension on the Korean peninsula.

Najib Predicts He’ll Extend Grip on Power in Malaysia Election. Malaysia’s Prime Minister Najib Razak says he’s expecting a “better result” in an election that will pit him against his one-time mentor.

Ascott forms JV with Huazhu Hotels, CJIA Apartments to grow Citadines in China. The joint venture will have an initial registered capital of 100 million yuan (S$21 million).In the initial years, the JV will expand Citadines’ footprint in first-tier cities such as Shanghai, Beijing and Shenzhen. It has secured its first property in the Pudong district of Shanghai.

Ezion warns of Q1 net loss, but says operating cashflow still positive. EZION Holdings expects to post a net loss for the first quarter of 2018 due to “delays in re-deployment of some of the group’s assets” while a refinancing exercise was being finalised.

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

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

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