Daily Morning Note – 1 October 2021

PHILLIP SUMMARY

Asian stocks looked set to start October on the back foot, after their U.S. peers capped their biggest monthly selloff since March 2020 with further losses. Futures pointed lower in Japan and Australia and steadied in the U.S. in early Asia trading. China begins a week-long holiday and Hong Kong’s market is shut Friday. U.S. shares fell Thursday even after confirmation that the House passed a nine-week spending bill to avert a U.S. government shutdown. The S&P 500 closed at the lowest level since July, extending its September losses to almost 5%. Economically sensitive companies like industrials and financials were among the worst performers. Treasuries rallied with the 10-year yield closing below 1.50%. The dollar gave up some of this week’s gains. Crude oil edged higher after a tumultuous session during which China was said to order its top energy companies to secure energy supplies at all costs amid shortages, prompting the White House to reiterate its own concerns over rising prices.


BREAKING NEWS

SG

Mainboard-listed logistics management service provider Cosco Shipping International on Thursday announced the proposed disposal of a 60 per cent stake in Cosco Shipping Singapore for US$42.4 million in an interested party transaction.

Publisher and awards organiser, Audience Analytics, debuted on the Catalist board on Thursday following its fully-subscribed initial public offering (IPO) which closed on Tuesday, through which the company raised S$5.5 million. Shares of Audience Analytics opened at S$0.315, up S$0.015 or 5 per cent from its IPO share price of S$0.30. Its shares later closed flat at S$0.30.

Pharmaceutical company iX Biopharma, through its wholly-owned subsidiary, has struck an agreement with CRPCG for the licensing, supply and distribution of Wafesil, a sublingual sildenafil wafer for the treatment of male erectile dysfunction, in China. In a bourse filing on Thursday, the company said the new licensing agreement runs for an initial term of 10 years.

Building contractor Lian Beng Group said its key executives were paid more for FY2021 ended May due to the group’s overall improvement in profitability. The company attributed this improvement to better performance at its property development and other business segments.

Capitaland China Trust (CLCT) has obtained its maiden S$150 million sustainability-linked loan from UOB, its manager said on Thursday.

The Urban Redevelopment Authority (URA) has released for sale three residential sites at Lentor Hills Road (Parcels A & B) and Jalan Tembusu, it said in a statement on Thursday.


US

A federal judge on Thursday rejected Wells Fargo & Co’s bid to dismiss a lawsuit claiming it defrauded shareholders about its ability to rebound from five years of scandals over its treatment of customers. The fourth-largest US bank has operated since 2018 under consent orders from the Federal Reserve and two other US financial regulators to improve governance and oversight, with the Fed also capping Wells Fargo’s assets. Shareholders said bank officials falsely claimed in TV interviews, analyst calls and congressional testimony that the bank was mending its ways, when regulators actually viewed its progress as “deficient” and “unacceptable.”

Cloud-based call centre operator Five9 Inc said on Thursday that its merger with Zoom Video Communications Inc has been terminated by mutual agreement. The development comes a week after a US Justice Department-led committee was reviewing Zoom’s proposed US$15 billion all-stock deal to buy Five9, according to a letter filed with US regulators.

YouTube announced on Wednesday it would remove videos and some high-profile users that falsely claim approved vaccines are dangerous, as social networks seek to crack down on health misinformation around Covid-19 and other diseases.

Meesho, an Indian “social commerce” platform backed by Facebook and SoftBank Group, said on Thursday it had raised US$570 million in a funding round led by Fidelity Management & Research Company and B Capital Group.


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

Amazon.com Inc – Much more growth ahead

Recommendation: BUY (Initiation); TP: US$4,329.00

Last Done: US$3,285.04; Analyst: Timothy Ang

– Cloud services and advertising to spearhead secular tailwinds with expected revenue growth of 33% and 54% respectively in FY21e.

– Core e-commerce business rapidly scaling up in fulfilment and logistics to further widen its moat. Fulfilment centre square footage is expected to jump 44%.

– Initiate coverage with BUY recommendation and DCF target price (WACC 6.2%) of US$4,329.

>> Read more research reports

Technical Pulse: JD Logistic Inc.

Recommended: Technical BUY; Analyst: Chua Wei Ren

JD Logistic Inc (HKEX: 2618) has broken out of the downtrend line and although prices has not made another significant high to confirm the uptrend, technical is pointing out a potential upside.

Buy limit: 30.35 Stop loss: 27.50 Take profit 1: 37.96 Take profit 2: 40.46

>>>Read more Technical reports

POEMS Podcast: Let the Money Talk

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City Developments – SGX Company Insights Ep 27

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