Daily Morning Note – 1 Oct 2020

PHILLIP SUMMARY

Asian stocks were set for modest gains at the start of the year’s final quarter though volumes may be subdued Thursday with many markets closed for holidays. U.S. shares earlier finished higher after a volatile session.

Futures in Japan and Australia climbed. S&P 500 contracts were flat. The U.S. index climbed 0.8%, paring gains of as much as 1.7% after Treasury Secretary Steven Mnuchin said there had been no agreement on pandemic relief, though talks would continue. Speculation a deal was in the works kept the benchmark at a two-week high. The dollar declined and Treasury yields ticked higher.

BREAKING NEWS

Sembcorp Marine (SMM) shares rose 2.8 per cent on Wednesday following Keppel Corporation‘s Vision 2030 update on Tuesday which included the commencement of a strategic review of its offshore and marine (O&M) segment. While declining to disclose specific details, Keppel’s chief executive officer Loh Chin Hua said that “all options are available to the group” – including the merger of Keppel O&M with rival SMM, as well as a complete divestment of the segment.

Fintech startup SOCASH has announced a partnership with OCBC to provide the bank’s customers with more cash withdrawal points. The Singapore-based startup will also serve as the cash management and distribution solution to the lender’s retail and small and medium enterprise (SME) customers, it said.

Capitaland Retail China Trust (CRCT) will be expanding its investment strategy beyond the retail sector to include assets that are used for office and industrial purposes, CRCT’s manager announced on Wednesday. It will focus on long-term investment in a “diversified portfolio of income-producing real estate and real estate-related assets in China, Hong Kong and Macau”. This includes assets used primarily for retail, office and industrial purposes including business parks, logistics facilities, data centres and integrated developments.

Mainboard-listed Hong Leong Asia‘s subsidiary, Airwell Air-Conditioning Technology, will be disposing assets for a total cash consideration of 141 million yuan (S$28.3 million) and will wind up and dissolve following the disposal. Airwell Air-Conditioning has entered into a sale and purchase agreement with Taicang Loucheng High-tech Group to sell a property in China, including its land use rights, home ownership rights and the facilities and assets.

Keppel Reit‘s trustee has priced S$150 million of fixed-rate subordinated perpetual securities at 3.15 per cent, the real estate investment trust (Reit) manager announced on Wednesday.These will be consolidated and form a single series with the existing S$150 million perps issued on Sept 11. The new perps are expected to be issued on Oct 7, and listed on the Singapore bourse on or around Oct 8, the Reit manager said.

Environmental protection solutions provider Sunpower Group has entered a strategic cooperation agreement with Sichuan Yongxiang in a bid to solidify its position in serving the renewable energy industry. Sichuan Yongxiang primarily manufactures and distributes chemical products such as high-purity crystalline silicon and electronic grade polysilicon.

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

TECHNICAL REPORTS

Capitaland Mall Trust

Analyst: Chua Wei Ren

Recommended Action: Technical SELL

Capitaland Mall Trust (SGX: C38U) has been on a range bound in a form of a larger corrective flat waves since the strong impulse down move in March 2020. To add on, the recent technical indicate a stronger downside to come.

>> Read more technical reports

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