ETF Monthly March 2024

Analyst: Zane Aw

  • Review of asset classes performance in March – All ETFs were in the green, with those tracking Gold (GLDM), Oil (XOP) and Bitcoin (BITO) standing out as they surged between 8-13%.
  • For their current trends, S&P 500, Oil, Bitcoin and Hang Seng Index are trading in an uptrend. US Treasury Bonds, Gold and Singapore Equities remain in a range consolidation.
  • Going into April, we are most upbeat on Bitcoin, Hang Seng Index, Oil and S&P 500 to extend their recent gains. Meanwhile, price consolidation is likely for US Treasury Bonds and Singapore Equities in April.

Thai SDR Monthly March 2024

Analyst: Zane Aw

  • Review of performance in March – Most Thai SDRs were in the green except CP All and The Siam Cement Public Co. Ltd which were both down over 4%. Delta Electronics was the top gainer, rebounding 5% in March.
  • For their current trends, Advanced Info Service, Airports of Thailand, CP All, Gulf Energy Development, Kasikornbank and PTT Exploration & Production Public Co. Ltd are in a range consolidation phase. Meanwhile, Delta Electronics and The Siam Cement Public Co. Ltd are in a downtrend.
  • Heading into April, we are most upbeat on Kasikornbank and PTT Exploration & Production to extend their recent gains. Price consolidation is likely for CP All, while we are bearish on Advanced Info Service, Airports of Thailand, Delta Electronics and Gulf Energy Development.

Trades Initiated in the past week


Week 14 equity strategy: Singapore equities performed dismally in 1Q24. After Thailand and Hong Kong, Singapore was the worst performer in Asia Pacific. On a 1-year performance, we fared better by not declining as much, or only down 2.65% (USD terms). This compared with the double-digit declines in Thailand (-19%), Hong Kong (-17%), and China (-11%). When we ponder over the strength in Singapore equities, it will be its currency and dividend yield of 5.6%. The Singapore dollar is on a solid foundation. It is the only triple AAA-rated sovereign country in Asia, highest current account to GDP globally, runs a balanced fiscal budget, and foreign reserve inflows of US$250bn since the pandemic (including S$237bn reserves management government securities).

The appeal of dividend yield stock is sensitive to interest rates. And the path to rate cuts by the Fed is now less clear. The Fed’s preferred core PCE inflation rose 2.8% YoY in February. The inflation rate has almost halved in 18 months. But the trajectory forward will be challenging. Goods deflation in the US is tapering off and made worse with gasoline prices climbing back to five-month highs. The base effect will be another challenge in 2H24. Markets are now rolling back their expectations towards 2 rate cuts in 2024.

In our Phillip Absolute 10 model portfolio for 2Q24, we replaced Frasers Centrepoint Trust with Cromwell European REIT. We find the yield attractive at 10% with a portfolio of assets registering positive rental reversions, resilient occupancy and de-gearing plans underway. We also replaced OCBC with DBS due to the higher dividend yield of 6.7% paid quarterly and visibility of stable earnings.

Paul Chew
Head Of Research

Singapore shares ended a shortened trading week down 0.9 per cent on Thursday (Mar 28). The biggest gainer was Yangzijiang Shipbuilding which climbed 3.2 per cent or S$0.06 to S$1.91. The biggest decliner was CapitaLand Investment which fell 2.6 per cent or S$0.07 to S$2.68.

The Dow and S&P 500 finished at fresh records on Thursday, adding to first-quarter gains on a mix of solid economic data and expectations of easing Federal Reserve policy. The Dow Jones Industrial Average ended at 39,807.37, up 0.1 per cent and a new all-time high that lifted the index closer to 40,000 points. The broad-based S&P 500 advanced 0.1 per cent to 5,254.35, also a record, while the tech-rich Nasdaq Composite Index slipped 0.1 per cent to 16,379.46.

Top gainers & losers


Events Of The Week



Singapore’s biggest bank DBS Group is confident of achieving a return on equity (ROE) of 15 per cent to 17 per cent in the medium term or over the next three to five years, its chief executive officer Piyush Gupta said on Thursday (Mar 28). Drivers include faster growth among its high ROE businesses such as wealth management and global transaction services. Meanwhile, DBS will allocate between S$300 million and S$500 million in capital to its India operations over the next three to four years and grow profitable consumer and small and medium-sized enterprises banking businesses there, Gupta said. DBS is also bullish on China’s greater bay area, and China in the long term, Gupta said. The bank announced in end-December that it was raising its stake in China’s Shenzhen Rural Commercial Bank in a S$376 million deal.

Rex International Holding’s 91.81%-owned subsidiary, Masirah Oil Limited, has started its multi-well programme in Oman’s offshore Yumna Field. On March 28, Masirah Oil announced the spudding of the Yumna-5 well in Block 50 Oman, which Masirah Oil fully owns and operates. The Yumna-5 well will be drilled at the crest of the structure to drain attic oil left unswept by current producers as part of a multi-well programme, which also includes the work-over of two existing production wells, Yumna-2 and Yumna-3. Masirah Oil will provide updates upon the completion of the of the drilling campaign, which will take about 90 days.

ComfortDelGro has won contracts worth £422 million, or S$720 million, to run public buses in the UK for five years. The contracts, won by its UK unit Metroline, were given by the Greater Manchester Combined Authority (GMCA). The contracts come with options to be extended for two, one-year terms. Under these contracts, Metroline will operate 232 different services using 420 buses and over 1,350 employees, which adds twice as many services and a 30% increase over its London portfolio. ComfortDelGro’s UK unit, Metroline, is the fourth largest scheduled bus operator in London and operates about 17% of the city’s scheduled bus services. Metroline is part of ComfortDelGro’s wider operations in the UK, which include Argyle Satellite, Adventure Travel, CityFleet Networks, Computer Cab, KingKabs, Scottish Citylink Coaches, Megabus and Westbus Coach Services. These companies operate in 23 different towns and cities, offering different kinds of transport services via buses, coaches, taxis, and private hire vehicles.

SIA Engineering Company (SIAEC) has announced that it has entered into an agreement with Pratt and Whitney to exit from the PW1500G engine risk-revenue sharing programme (RRSP) that was held through SIAEC’s wholly-owned subsidiary NexGen Network (2) Holding (NGN2). Upon exiting the RRSP, SIAEC will write off S$25.1 million of net assets associated with the programme, which was previously known as the CSeries aircraft engine programme. NGN2 invested in the RRSP in 2010 and had a 1% share of the programme prior to its exit. Participants of the RRSP are required to share the costs, risks and revenues of the PW1500G geared-turbofan engine, from its design and development to its production, post-certification engineering support, marketing and sales. This also included the provision of aftermarket services including maintenance, repair and overhaul (MRO) services. The investment came with derived benefits for Eagle Services Asia Private Limited (ESA), a joint venture (JV) in Singapore between Pratt and Whitney and SIAEC, who held 51% and 49% stakes in the JV respectively. This included new engine capability and MRO work for ESA, and relevant investment support grants related to the development of new engine capability. SIAEC says that as the RRSP requires further capital injection, after careful deliberation and with Pratt and Whitney’s agreement, a decision was taken to exit from the RRSP. This will allow the company to deploy capital which would otherwise have been used to support the funding of the RRSP to other areas that are better aligned with its growth strategy.

MDSA Resources, an indirect wholly owned subsidiary of Hatten Land, has received a notice of default and a letter of demand from Kenanga Investment Bank for a total of RM14,114,652.15 (S$4 million), it said on Thursday (Mar 28). The sum owed was in relation to Hatten Land’s medium-term note (MTN) programme. Hatten Land has engaged Deloitte & Touche Financial Advisory Services to develop a restructuring plan and explore fundraising strategies amid its financial challenges. The notice of default from the trustee representing Kenanga Investment Bank – the principal adviser, lead arranger, lead manager and facility agent of the MTN programme – was in relation to the RM12,350,000 Notes issued by MDSA Resources under the programme. The sum of RM12,350,000 and RM492,646.58, being the outstanding principal sum and coupon of the programme respectively, should be paid to the trustee no later than Apr 5, 2024, said the notice, dated Mar 25, 2024. MDSA Resources also received a letter of demand dated Mar 25 from the solicitor representing Kenanga in relation to the MTN programme, for the outstanding amount of RM1,272,005.57 as at Mar 20. This sum, together with late payment interest accrued at 10 per cent per annum from Mar 21, 2024, till the date of full settlement, should be paid to Kenanga no later than seven days from the date of the letter, the letter said.


Inflation rose in line with expectations in February, according to a measure the central bank considers its more important barometer. The personal consumption expenditures price index excluding food and energy increased 2.8% on a 12-month basis and was up 0.3% from a month ago, the Commerce Department reported Friday. Both numbers matched estimates. Including volatile food and energy costs, the headline PCE reading showed a 0.3% increase for the month and 2.5% at the 12-month rate, compared to estimates for 0.4% and 2.5%.

The US House of Representatives has set a strict ban on congressional staffers’ use of Microsoft’s Copilot generative AI assistant. “The Microsoft Copilot application has been deemed by the Office of Cybersecurity to be a risk to users due to the threat of leaking House data to non-House approved cloud services” the House’s Chief Administrative Officer Catherine Szpindor said. “We recognize that government users have higher security requirements for data. That’s why we announced a roadmap of Microsoft AI tools, like Copilot, that meet federal government security and compliance requirements that we intend to deliver later this year,” a Microsoft spokesperson told Reuters.

The Biden administration on Friday revised rules aimed at making it harder for China to access US artificial intelligence (AI) chips and chipmaking tools, part of an effort to hobble Beijing’s chipmaking industry over national security concerns. The rules, released in October, seek to halt shipments to China of more advanced AI chips designed by Nvidia and others as Washington cracks down on Beijing over concerns its advancing tech sector could help boost China’s military. The new rules, which run 166 pages in length, go into effect on Thursday. They clarify, for example, that restrictions on chip shipments to China also apply to laptops containing those chips. The Commerce Department, which oversees export controls, has said it plans to continue updating its restrictions on technology shipments to China as it seeks to bolster and fine-tune the measures.

Meta Platforms cannot delay the US Federal Trade Commission (FTC) from reopening a probe into alleged privacy failures by its Facebook unit while the company pursues a lawsuit challenging the agency’s authority, a US court ruled Friday. The Washington, DC-based US Court of Appeals for the DC Circuit in its order found that Meta had not shown its challenge was likely to be successful. The FTC wants to tighten an existing 2020 Facebook privacy settlement to ban profiting from minors’ data and expand curbs on facial recognition technology. The agency has accused Meta of misleading parents about protections for children. Meta, which has denied misleading parents about privacy risks, sued the FTC in November in a broad constitutional challenge against the agency’s ability to be both an investigative body and an adjudicative one. The FTC separately has accused Meta in an antitrust lawsuit in Washington of abusing its power in the social media market to crush or buy rivals. Meta has denied the agency’s claims, which could force the company to sell its Instagram photo-sharing platform and WhatsApp messenger.

Copper miner Freeport Indonesia has warned the Indonesian government that banning exports of copper concentrate in June could lead to a loss of US$2 billion in revenues for Jakarta, a company official said on Thursday (Mar 28). Indonesia’s export ban takes effect from June in an effort to force miners to invest in domestic smelting facilities, thus adding value to their products, and boosting earnings from exports. Freeport Indonesia, controlled by mining giant Freeport McMoran, though the Indonesian government is a majority shareholder, has called for the ban to be relaxed as its Gresik smelter would not be operating at full capacity by June. Chief Executive Wenas reiterated that construction of the Gresik smelter would be complete by May and start operating the following month, reaching full capacity later in 2024.

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


Cromwell European REIT – Asset rejuvenation strategy to drive organic growth

Recommendation: Buy (Initiation), Last Done: €1.38

Target price: €1.91, Analyst: Darren Chan

  • Resilient portfolio in terms of portfolio occupancy (FY23: 94.3%) and rent reversions (FY23: +5.7%). Occupancy is expected to remain stable this year, with only 13.5% of portfolio leases due for renewal.
  • CERT’s long-term 60:40 target asset class split between light industrial / logistics and well-located Grade A offices stands to benefit from the growth in e-commerce and the nearshoring trend, as well as flight to quality.
  • Divested €237mn at a 14.6% premium. Another €170mn of assets remaining that are earmarked for sale. The loss of income from divestments and redevelopments is a near-term softness but will keep gearing at their target range of 35-40%. We initiate coverage with a BUY recommendation on Cromwell European REIT with a DDM-derived target price of €1.91. The FY24e forward dividend yield is 10% based on the current share price. CERT is trading at a P/NAV of 0.65x.
  • <\ul>

    Phillip 2Q24 Singapore Strategy – Drifting sideways

    Analyst: Paul Chew

    • Singapore’s equity market rose a modest 0.5% in 1Q24. Most sectors were down during the quarter except banks and telecommunications.
    • Economic indicators point to a US and global economy that is flatlining. This is despite aggressive fiscal deficits to prop up the economy.
    • The lack of economic momentum and unclear path to rate cuts, keeps us cautious on Singapore equities. We favour sectors with resilient yield and earnings visibility, namely banks, conglomerates and telecommunications.

    Lion-Phillip S-REIT ETF – Resilient Dividends Despite Rate Hikes

    Recommendation: Accumulate (Initiation); TP: SG$0.91; Last Close: SG$0.82

    Analyst: Helena Wang

    • We value Lion-Phillip S-REIT ETF (LP SREIT) using a combination of historical dividend yield spread and price-to-book ratios. Using these two valuation methods, the target price are S$0.85 and S$0.97, respectively. Applying equal weightage to both valuations, we initiate coverage with an ACCUMULATE recommendation and target price of S$0.91.
    • Lion-Phillip S-REIT ETF gives exposure to the 22 REITs in Singapore. It is the only ETF whose holdings are entirely Singapore REITs. This ETF offers investors a diversified, convenient and efficient access Singapore REITs, stable income, and attractive book value.
    • We expect dividends from REITs to remain under pressure from higher interest rates. Due to interest rate hedges, effective interest rates will still creep up until 2025. In contrast, property valuations in Singapore have been stable supported by transaction prices. Interest rate cuts can provide REITs the triple benefit of a yield more attractive to bonds, lower interest expenses and increase valuations as cap rates compress.

    PSR Stocks Coverage



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