Daily Morning Note – 1 July 2020

PHILLIP SUMMARY

Asian stocks were poised for a muted start to a new quarter, with investors assessing better-than-estimated U.S. economic data amid concern over the coronavirus spread and Sino-American tensions.

Futures edged up in Japan and dipped in Australia, with Hong Kong closed for a holiday. S&P 500 contracts slipped after the gauge rounded out a 20% second-quarter surge. U.S. consumer confidence posted its biggest increase since 2011. After the close of regular trading, FedEx Corp. soared as the economic bellwether used an efficiency drive and a surge in health-equipment deliveries to shore up earnings. Treasuries and the dollar fell. Gold traded near $1,800 an ounce.

BREAKING NEWS

FRASERS Centrepoint Trust (FCT) is acquiring an additional 12.07 per cent stake in PGIM Real Estate Asia Retail Fund (ARF) for S$197.2 million, in line with plans to bolster its presence in Singapore’s suburban retail sector. FCT now holds a 24.82 per cent interest in ARF, through its wholly-owned subsidiary FCT Holdings (Sigma). The acquisition, expected to be completed in July, will raise FCT’s interest in the fund to 36.89 per cent.

A SUBSIDIARY of offshore services provider Mermaid Maritime has set up a new business unit focused on offshore platform installation and decommissioning, to target demand from major oil operators in Thailand. The offshore transportation, installation and decommissioning services business unit, parked under the subsidiary, Mermaid Subsea Services (Thailand), will comprise Thai personnel with at least a decade’s work experience in oil-and-gas operations and offshore facilities construction in the Gulf of Thailand.

THE founder of Mainboard-listed Luzhou Bio-Chem Technology Limited wants to take the company private in a deal that values it at S$17.8 million, so as to gain greater management flexibility and control over the company. Niu Ji Xing, who is also Luzhou’s executive chairman and chief executive, on Tuesday launched a voluntary conditional general offer via investment holding company Starnova, of which he is the sole director. Starnova is offering to acquire all the ordinary shares in Luzhou at S$0.03 apiece. The offer price is final and Starnova does not intend to revise it.

VIVIDTHREE Holdings is no longer proceeding with a proposed ordinary share placement that was to have given it S$1.9 million in net proceeds, as the working capital available is sufficient to meet its present and projected requirements, the Catalist-listed group said. The proposed placement – of up to 15.9 million new ordinary shares at a price of at least 12.6 Singapore cents apiece – was meant to strengthen Vividthree’s financial and working capital position.

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

TECHNICAL PULSE

AEM Holdings Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

AEM Holdings (SGX: AWX) bullish sentiment is still strong despite our sell call on 9th of June 2020. The regular flat termination point of sub-wave C has reached more than 90% of A and together with other technicals, the stock is set to continue its 5th wave rally.

>> Read more technical reports

RESEARCH REPORTS

Phillip 3Q20 Singapore Strategy – Responding with overwhelming force

Credit Analyst: Paul Chew


Reasons to be optimistic

– On monetary support, the FOMC dot plots indicate interest rates to remain near zero until end-2022. To keep rates low, we are in quantitative easing (QE) ad infinitum.

– On government support, the IMF predicts $11tr of fiscal measures globally to combat Covid-19. Fiscal deficits globally are expected to reach 13.9% of GDP. This is almost double the 7.2% during the global financial crisis.

– The trajectory and speed of the recovery are unclear. It will track the pandemic. More crucial is that a bottomed has formed, in our opinion. Highly-alerted healthcare authorities and informed social behaviour should prevent a more severe second wave.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: (PSR) Yoma Strategic Holdings (Initiation), SG REITs Sector and Phillip Singapore Weekly

Date: 22 June 2020

For more on Market Outlook

Phillip Research in 3 minutes: #23- Yoma Strategic Holdings; Initiation

For more videos on Phillip in 3 Mins

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





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