Daily Morning Note – 1 April 2022

Factsheets

Welcome to our Daily Morning Note from our Research team!

PHILLIP SUMMARY

U.S. equity futures edged up Friday after global shares suffered their worst quarter since the pandemic bear market, buffeted by risks from tightening Federal Reserve monetary policy and Russia’s war in Ukraine.

S&P 500 and Nasdaq 100 contracts made modest gains, Australian shares wavered and futures for Japan and Hong Kong pointed lower. China’s worst Covid outbreak since the early days of the pandemic, and a retreat in U.S.-listed Chinese stocks, are also weighing on sentiment.

Oil held losses triggered by a U.S. move to release roughly a million barrels a day from reserves to tackle rising energy costs. Russia’s invasion has disrupted commodity flows, fanning prices for everything from fuel to food.

Treasuries were mixed Thursday, flattening the gap between two-year and 10-year yields as shorter-maturity rates rose and those for the longer tenor slipped. The bond curve has intensified worries about a looming economic downturn if the Fed uses aggressive interest-rate hikes to damp high inflation.


Top gainers & losers

Factsheets

BREAKING NEWS


SG

Keppel Telecommunications and Transportation (Keppel T&T) will sell its entire stake in Keppel Logistics to Geodis International SAS for some S$80 million, Keppel Corporation announced on Thursday (Mar 31). The proposed divestment is in line with Keppel Group’s 2030 plans to simplify and focus its business, and is expected to take place in the second quarter of this year, the company said in a bourse filing.

Mainboard-listed builder Low Keng Huat (Singapore) sank deeper into the red in the fiscal second half from a year ago, its latest financials released on Thursday (March 31) showed. Net loss for the 6 months ended Jan 31, 2022 stood at S$4.3 million, compared with a net loss of S$3.1 million posted the same period a year ago. The results translate to loss per share of 0.58 Singapore cents, against loss per share of 0.43 Singapore cents in the preceding half.

Wing Tai Holdings on Thursday (Mar 31) announced that its unit has bought the remaining 50 per cent interest in its freehold properties in Melbourne, Australia for A$49.4 million (S$50.1 million). The properties are 464-466 St Kilda Road and units 112-218, 23 of Brooklands Car Park on Queens Road.

More time and deliberation is needed, although “significant progress” was made, to advance the proposed combination between Keppel Offshore & Marine (O&M) and Sembcorp Marine (Sembmarine), Keppel Corporation and Sembmarine said on Thursday (March 31). Giving the update in a bourse filing some 9 months after first announcing talks on potentially combining the entities, the parties said they still need to complete due diligence, reach mutual agreement on the transaction terms and finalise definitive legal documentation.

The manager of Lendlease Global Commercial Reit (JYEU) on Thursday (Mar 31) declared that the amount of advance distribution to be paid in connection with the real estate investment trust’s (Reit) private placement will be S$0.011371 per unit. This amount comprises a taxable income of S$0.00804 and tax exempt income of S$0.003331, applicable for the period Jan 1 to Mar 30. This means holders of Lendlease Reit units as at 5 pm on Mar 30 are entitled to the advanced distribution.

Singapore Post (SingPost) said in a bourse filing on Wednesday (Mar 30) evening that it will be issuing S$250 million in perpetual securities with an initial distribution rate of 4.35 per cent per annum for the first 5 years. The distribution rate will be reset on Jul 6, 2027 to a rate equivalent to the 5-year Singapore Overnight Rate Average Overnight Indexed Swaps, in addition to an initial spread of 2.183 per cent and a step-up margin of 0.25 per cent.

Hatten Land’s subsidiary Hatten Edge has inked an agreement with a new business partner which will allow the addition of up to 550 crypto mining rigs to Hatten Land crypto mining facilities in Melaka. The first 50 sets are targeted to be delivered as pilot batch machines by end-April with an option to deliver an additional 500 rigs in 2022, announced the group on Thursday (Mar 31).


US

US consumer spending slowed significantly in February, while price pressures continued to mount, with inflation posting its largest annual gain since the early 1980s. The Commerce Department said on Thursday (Mar 31) that consumer spending, which accounts for more than 2/3 of US economic activity, rose 0.2 per cent last month. Data for January was revised higher to show outlays rebounding 2.7 per cent instead of 2.1 per cent as previously reported. Economists polled by Reuters had forecast consumer spending increasing 0.5 per cent.

Apple on Thursday released a new program for businesses to set up, manage and install software on worker iPhones, iPads and Macs. The product, called Business Essentials, ranges from $2.99 per month to $24.99 per month per worker. It allows a boss or a system administrator to install corporate apps, set passcode policies, track or shut down a lost phone or laptop and provide access to cloud storage. In the more expensive tiers, users are given AppleCare credits so they can get repairs from Apple stores.

GameStop shares surged as much as 22 per cent in extended trading after the company said it plans to ask shareholders for approval of a stock split in the form of a dividend. The gaming retailer will request at its upcoming annual meeting that shareholders approve a proposal to increase the number of Class A shares to 1 billion from 300 million, according to a filing Thursday (Mar 31) with the US Securities and Exchange Commission.

Union supporters at Amazon’s warehouse in Bessemer, Alabama, on Thursday appeared headed toward defeat for a second time. However, with hundreds of contested ballots at play, the election results are still too close to call. Of the 2,375 ballots cast, there were 993 votes opposing the union and 875 in favor. Approximately 6,153 workers at the Bessemer warehouse were eligible to vote on whether to join the Retail, Wholesale and Department Store Union.

A sharp uptick in inflation has so far not caused a slowdown in demand for travel in the spring and summer months, Booking Holdings CEO Glenn Fogel told CNBC on Thursday. “Not yet. Not yet,” said Fogel, whose company offers online travel services, including flight booking. He cited the Covid pandemic’s disruptions to travel routines. “When you have two years of people not traveling the way they want to travel and you have a lot of savings built up in that time period, prices can be really high and people are saying, ’I don’t care. I just want to travel. I want to go somewhere,” the CEO said in an interview on “Closing Bell.”

President Joe Biden will invoke the Defense Production Act to encourage domestic production of minerals required to make batteries for electric vehicles and long-term energy storage. It will also help the U.S. minimize dependence on foreign supply chains. The president’s order could help companies receive government funding for feasibility studies on projects that extract materials, including lithium, nickel, cobalt, graphite and manganese, for EV production.

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


POEMS Podcast: Let the Money Talk

Factsheets

Recent Podcasts:

Del Monte 3Q22 Results – SGX Company Insights Ep 47

Lendlease Global Commercial REIT – SGX Company Insights Ep 46

City Developments Limited – SGX Company Insights Ep 45

Factsheets

Visit www.stocksbnb.com to view our research reports!


RESEARCH REPORTS

Factsheets

Join our Phillip Securities Research Telegram channel for the latest update on our stock coverage!

Click the link to join: https://t.me/stocksbnb

HK Reports – Read up on our Hong Kong reports here


RESEARCH VIDEOS

Factsheets

Weekly Market Outlook: Sea Ltd, Enviro-Hub, Southern Alliance, MCT & MNACT, SG Weekly & More

Date: 28 March 2022

Click here for more on Market Outlook

Sign up for our webinars here, and be among the first to receive economy and market updates.


Factsheets

Phillip Research in 3 minutes: #29 – Keppel Corporation; Initiation

Click here for more videos on Phillip in 3 Mins


For any research-related matters, email: research@phillip.com.sg

For general enquiries, email: talktophillip@phillip.com.sg
or call 6531 1555.

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 is provided to you for general information only and is not intended to create any binding legal relation. The information or opinions provided in this email do not constitute investment advice, a recommendation, an offer or solicitation to subscribe for, purchase or sell any investment product. 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 should obtain advice from a financial adviser before making a commitment to invest in any investment product or service. In the event that you choose not to obtain advice from a financial adviser, you should assess and consider whether the investment product or service is suitable for you before proceeding to invest.

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.