Daily Morning Note – 10 September 2021

Dear valued client,

Asian stocks looked set for a steady start Friday as traders weigh the prospect of reduced central bank stimulus as well as challenges to economic reopening from the delta coronavirus variant.

Futures for Japan, Australia and Hong Kong pointed to modest gains. U.S. contracts fluctuated after the S&P 500 posted its longest losing streak since June. Reports showed lower U.S. jobless claims but also more virus disruption, including Microsoft Corp.’s move to scrap plans to fully reopen its offices.

Treasuries climbed amid the mood of caution and strong demand at a 30-year bond auction. The dollar was little changed in early Asian trading. In commodities, oil slid after China decided to tap crude reserves to ease a surge in energy costs. A broad rally in base metals markets gathered pace.

The Nasdaq Golden Dragon China Index edged lower after a bruising tumble in Chinese technology companies in Asia. Beijing’s crackdown on a range of private industries as well as possible steps to cushion the second-largest economy remain in focus for traders.


SG News

Canned food brand Del Monte Pacific Limited posted a net profit of US$18.3 million for the first quarter ended July 31, reversing from a loss of US$3.2 million for the same period a year ago. Revenue rose 11.9 per cent to US$462.1 million, driven by higher sales in the US across almost all major segments, higher exports of S&W fresh pineapples as well as processed pineapples and other products. The group, which is dual listed on the Singapore Exchange and the Philippine Stock Exchange, improved its margins by 600 basis points to 28.9 per cent from better sales of higher-margin branded products in the US and lower costs. Earnings per share was 0.69 US cents, compared with a loss per share of 0.42 US cents previously. No dividends were declared for this quarter and the prior year quarter as the group does not declare dividends based on first quarter and third quarter results.

Singapore Press Holdings (SPH) said on Thursday that winding up the media business may incur “potentially heavy financial costs”, and any sale of the media business would also require regulatory approval. This was in response to questions sent by shareholders on why the board did not consider selling or shutting down the media business, ahead of the extraordinary general meeting (EGM) to be held on September 10. SPH is seeking to get shareholders’ approval on its proposed restructuring and formation of a new constitution. SPH, which publishes The Business Times, had announced in May that it will be transferring its entire media-related business to a company limited by guarantee (CLG). This came as part of a strategic review announced in March amid structural changes that had severely disrupted the traditional business model, which relied on print advertising revenue. With the loss-making media business hived off, Keppel had made a S$2.2 billion bid to privatise SPH’s non-media business. The deal, which values SPH at S$3.4 billion, will take place through a scheme of arrangement, subject to SPH shareholders first approving its media restructuring plan.

E-commerce and gaming company Sea is looking to raise US$6.3 billion in a share and convertible bond sale in South-east Asia’s largest ever capital raising, tapping growing investor interest in the region. This is the second major fund raising in less than a year for the US$185 billion company, which is seeking to scale up its global expansion by testing out possible new markets, and the latest among a slew of deals in South-east Asia. Sea, known for its Shopee e-commerce platform, is looking to sell 11 million American Depository Receipts with the option to offer 1.65 million more as part of a so called greenshoe option, the Singapore-headquartered company said in a regulatory filing on Thursday. It is also raising US$2.5 billion in a convertible bond that has a US$375 million greenshoe attached. At Sea’s closing stock price of US$343.8 in New York on Wednesday, the share sale could raise up to US$3.8 billion.

US News

Applications for US state unemployment benefits fell last week by the most since late June as the labour market continues towards a full recovery. Initial unemployment claims in regular state programmes decreased to 310,000 in the week ended Sept 4, Labor Department data showed on Thursday. The median estimate in a Bloomberg survey of economists called for a slight decrease to 335,000 new applications. Continuing claims for state benefits fell to 2.78 million in the week ended Aug 28. Initial claims have declined steadily as vaccination progress and reopenings have increased demand for workers. Still, claims are higher than pre-pandemic levels, and economists expect economic growth to slow in the third quarter as stimulus spending moderates. The recent surge in Covid-19 infections risks interrupting a steady recovery in the labour market, especially if outbreaks prompt school districts to reconsider in-person schooling.

US lawmakers launched discussions Thursday on a US$3.5 trillion spending package crucial to President Joe Biden’s legislative agenda, as several days of debate on its major sections got underway. Five key House committees began “marking up” their respective portions of the bill, with the most fraught issue remaining how to pay for the giant raft of measures. Democrats want to push the package through over the coming weeks using a fast-track process known as reconciliation that allows budget-related legislation to advance through the Senate by simple majority rather than the usual 60 votes. It would include funding for climate measures, new investments in infrastructure, residency status for millions of migrant workers and two years of paid tuition at public universities.

Oil prices fell to a two-week low on Thursday as China rolled out a plan to release state oil reserves, the US weekly crude draw was smaller than expected and US Treasuries rallied as investors sought safer assets. In volatile trade, Brent futures fell US$1.15, or 1.6 per cent, to settle at US$71.45 a barrel. US West Texas Intermediate (WTI) crude fell US$1.16, or 1.7 per cent, to US$68.14. That was the lowest settlement for both since Aug 26. “A tremendous auction in the 30-year bond with the lowest interest rate print since January put a significant scare into the (oil) market in what looks like a flight to safety,” said John Kilduff, partner at Again Capital LLC in New York. After falling over US$1 a barrel early in the session, both benchmarks turned positive following reports that a ship was stuck in the Suez Canal. The ship was refloated and caused no delays.

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

HK Reports – Read up on our Hong Kong reports here

Webinar Of The Week

Weekly Market Outlook: Koufu Group, Apple Inc, Koda, UGHealthcare, SPH, Isoteam, SG Banking Monthly

Date: 6 Sep 2021

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #29 Keppel Corporation; 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

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


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