Daily Morning Note – 1 April 2020

WEEKLY MARKET OUTLOOK WEBINAR

PHILLIP SUMMARY

Stocks in Asia looked set to kick off the new quarter in a mixed fashion as investors examine data showing tentative signs that China’s economy is beginning to recover against the deteriorating situation in the U.S. The S&P 500 Index ended near the session lows, futures in Japan and Hong Kong edged lower, while contracts in Australia rose. In China, a private reading on the country’s manufacturing sector that’s due Wednesday is expected to show a rebound for March, while treasuries edged higher.

Global stocks are coming off their worst quarter since the end of 2008, tumbling 22%. That’s enticed some investors back into equities, but with the volatility gauge remaining significantly elevated, many expect further declines. Meanwhile, the Aussie is set for a comeback after a brutal quarter on stimulus bets. Elsewhere, crude rose 1.9% and gold was up 0.1%.

BREAKING NEWS

Ascendas Real Estate Investment Trust (Reit) on Tuesday said it has acquired a 25 per cent equity stake in business park Galaxis for S$102.9 million from vendor MBK Real Estate Asia. Situated in Singapore’s one-north precinct, Galaxis is expected to generate a net property income yield of approximately 6.2 per cent and 6.1 per cent pre-transaction costs and post-transaction costs respectively.

Financial institutions in Singapore are to walk single file on how certain relief measures should be structured to allow distressed property owners and small- and medium-sized enterprises (SMEs) a pause on debt repayments or payments on insurance if hit with a sharp loss of income. From April 6, MAS said qualifying SMEs seeking to pause on their principal payments on their secured term loans can do so, and have a deferment last till Dec 31, 2020. Data from the MAS on Tuesday showed that more than S$40 billion of secured borrowings held by SMEs should qualify for such a deferment.

Australia’s TPG Telecom unveiled its first commercial price plan for the Singapore mobile market on Tuesday, more than a year after it launched free trial services in December 2018. Singapore’s fourth wireless operator will phase out its trial services as it rolls out a new no-contract, SIM-only product for S$10 a month.

Hong Leong Asia recorded a 39.1 per cent hike in net profit to S$34.4 million for the year ended Dec 31, 2019, on account of higher business volumes and better contribution margins by its Building Materials Unit (BMU), said the industrial conglomerate on Tuesday. Other income, which comprised mainly interest income and government grants, increased 46.6 per cent to S$71.5 million from the year before, as its subsidiary Yuchai benefited from higher government grants and interest income in 2019

Mainboard-listed SATS on Tuesday said it has issued S$200 million worth of five-year notes. The notes, which mature in 2025, will have a fixed coupon rate of 2.88 per cent per annum, payable semi-annually in arrear. The Series 001 Notes are expected to be listed on the Singapore Exchange on Wednesday, in denominations of S$250,000. Net proceeds will be used for refinancing of existing borrowings and general corporate purposes, SATS said in a bourse filing on last Wednesday.

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

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Market Outlook: (PSR) City Development Limited, CapitaLand Limited, Dasin, EC World, REITS & Banking Monthly, SG Weekly & Technicals

Date: 16 March 2020

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