Daily Morning Note – 1 August 2019


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Stocks cratered, the dollar hit a more than two-year high and bond yields ripped higher after Fed Chairman Jerome Powell suggested that policymakers were not embarking on a new cycle of rate cutting, after it trimmed the fed funds rate by a quarter point Wednesday.

Markets have been on tenterhooks, once expecting three rate hikes this year, and then an easy Fed policy stance, even as the economy has been showing signs of improvement. But the Fed has been facing the unusual task of explaining why it was cutting rates in the face of stronger economic data.


Singtel’s outlook was cut to “negative” by credit agency Standard & Poor’s on Wednesday, a week before the telco is slated to release its first-quarter results.

SGX on Wednesday posted a net profit of S$103.9 million in the fourth quarter, up 24.1 per cent from the same period a year earlier. Revenue in the three months ended June 30 rose 16.5 per cent to S$248 million, led by record derivatives revenue of S$130.1 million, up 52.2 per cent from the same period a year earlier. Equities and fixed income revenue fell 9.4 per cent to S$92 million.

SIA’s net profit for the first quarter ended June fell 20.7 per cent to S$111 million from S$140 million a year ago owing to higher share of losses from associated companies and net finance charges plus an uptick in expenditure.

Roxy-Pacific Holdings saw earnings decline in the second quarter, according to results released on Wednesday, on a mix of higher costs and drops in both operating income and contributions from associates.

No Signboard Holdings will likely extend its losses into its third quarter to June 30, the board warned on Wednesday. The group – which had rung up losses of S$337,500 in the three months prior – “is expected to report a net loss resulting mainly from lower revenue coupled with higher operating costs”, the board said.

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


Suntec Real Estate Investment Trust

Recommended Action: Technical SELL

Suntec REIT’s bullish move was invalided when the supposed cup and handle formation failed to materialise and instead, it formed into a descending triangle. As of 31st July 2019, the strong bearish candle confirms the evening star formation plus the closing below the 22 simple moving average.

Read more technical pulse


Sheng Siong Group – Another marvellous year in store expansion

Recommendation: ACCUMULATE (Downgraded), Last Done: S$1.15

Target Price: S$1.30 Analyst: Paul Chew

– 2Q19 revenue was above our expectations. PATMI was marginally below estimates due to higher operating cost from new stores and S$800k negative impact from the new lease accounting standard.

– After opening three stores in May, SSG is tendering for another six new stores in 2H19.

– The interim dividend was raised by 6% to 1.75 cents.

– We modestly reduced our FY19e profit forecast due to the change in accounting method. Our recommendation is lowered from BUY to ACCUMULATE following the share price performance. Our target price of S$1.30 is unchanged. SSG is still riding on the growth of its store expansion and market share gains.

Webinar Of The Week

Market Outlook: : : (PSR) CapitaLand Mall Trust, Frasers Centrepoint Trust, JP Morgan, US Weekly, China Weekly Musings, China Brokerage Sector, Technical Outlook

Date: 29 July 2019

For more on Market Outlook

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