Daily Morning Note – 1 June 2020

PHILLIP SUMMARY

Stocks in Asia looked set for a mixed start as investors weighed the simmering U.S.-China tensions against violent protests in some American cities. President Donald Trump’s long-touted response to China’s crackdown on Hong Kong included a barrage of criticism but stopped short of fully escalating tensions between the two nations. The S&P 500 ended higher on Friday, when futures in Japan and Hong Kong climbed. Global stocks rose for a second month in May.

BREAKING NEWS

Thai Beverage Public Co (ThaiBev) has dismissed reports it is seeking a buyer for its businesses in Vietnam. It said in a Friday filing after the market close that the claim, made in recent reports by news media in Vietnam, is “entirely without merit”.

Shares of Broadway Industrial Group surged 24.5 per cent on Friday after the company announced it has taken another step in its plan to dispose of its hard disk drive business.

CAPITALAND will deploy tech solutions such as disinfecting robots and air disinfection systems at its malls to enhance its cleaning and disinfecting routines ahead of Singapore’s Phase One reopening in June, it said in a bourse filing on Friday.

ASCOTT Residence Trust (ART) will not be redeeming its S$250 million, 4.68 per cent perpetual issue on its first call date next month. The move sets a precedent for real estate investment trust (Reit) perpetuals.

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

TECHNICAL PULSE

Technical Analysis: U.S Market – Potential market tops as the rally continues

Analyst: Chua Wei Ren

– The stock market is seeing recovery on optimism from the opening of the US economy. However, investors remain concerned that a 2nd wave of infection might push the market back down.

– Trump’s remarks with regards to China without mentioning any new tariffs or sanctions provided some relief to the market.

– However, as the severity of looting and riots in major U.S states worsens, curfew and lockdown have returned. As such, the market on Monday may adopt a wait-and-see approach.

– As key levels mentioned on our report dated 11th May are broken, we are looking at stocks testing higher levels.

– However, the neutrality remains as the next level of resistance remain untested.

>> Read more technical reports

RESEARCH REPORTS

Singapore Telecommunications Limited – Outlook is down (and under)

Recommendation: NEUTRAL (Maintained); Last close: S$2.49

Target Price: S$2.44, Analyst: Paul Chew


– 4Q20 revenue and earnings were below expectations. Australia is the largest drag to earnings. Optus earnings were down 83% YoY. Singapore mobile suffered from weaker roaming revenue but wage credits provided an uplift to margins.

– India was the highlight for associates with a turnaround in profits of almost S$98mn.

– FY20 final dividend was cut by 49% to 5.45 cents. No earnings guidance provided for FY21.

– Maintain NEUTRAL with a lower TP of S$2.44 (prev. S$3.18). Our FY21e PATMI is cut by 16%. Outlook will be weak for Singtel. Reduced international travel will lead to lower high margin roaming revenue. The soft economic background will hurt discretionary spending via lower prepaid usage and top-ups, negatively impacting the associates. Australia faces an added challenge of lower fixed broadband business post-NBN.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: (PSR) IREIT, ECW REIT, PropNex, CDG, ThaiBev, Singapore REITs/Banking Sector & SG Weekly

Date: 26 May 2020

For more on Market Outlook

Phillip Research in 3 minutes: #22- Singapore Banking Sector

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





Disclaimer
The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. 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 may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.
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.

 

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you

IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com