DAILY MORNING NOTE | 11 April 2023

Trade of the Day

Mapletree Industrial Trust (SGX: ME8U)

Analyst: Zane Aw

(Current Price: S$2.38) – TECHNICAL BUY
Buy price: S$2.38 Stop loss: S$2.33
Take profit 1: S$2.46 Take profit 2: S$2.55

Technical Pulse: Should you ‘’Sell in May and Go Away’’? Maybe not it seems

Analyst: Zane Aw

– “Sell in May and go away” is an investing adage that says an investor can improve annual returns by selling stocks in May and not reinvesting until November. When applied to the stock market, it refers to the seasonal market performance where summer months have historically averaged lower returns compared to others
– Contrary to this saying, the S&P 500 has yield gains in 21 of the 30 years (70%) with an average return of 0.56%. It has seldom been among the top 3 worst performing months annually, only in 5 of the 30 years (16.7%). In addition, May, September and October share the same frequency of being the worst months
– Investors should remain vested through the period come May as the predictive power of this adage is questionable and opportunity costs incurred of not staying vested could be significant especially as the saying has been off the mark in the last decade

Singapore shares fell on Monday (Apr 10) after a long Easter weekend, as caution led the day ahead of a busy week of economic data, keeping traders mostly on the sidelines. Singapore shares slipped 6.05 points or 0.2 per cent to 3,294.43. Markets in Australia, Hong Kong and Europe remained closed on Monday for Easter. Key gauges in Japan, Taiwan, Malaysia and South Korea finished higher, while China also bucked the trend to end the day lower.

Wall Street stocks mostly rose on Monday following a mixed session on Asian bourses as markets digested solid US jobs data ahead of key inflation updates later in the week. Monday’s session was the first since the US Labor Department released March employment figures, which showed the economy added 236,000 jobs last month. This was slightly less than expected, and came as the unemployment rate inched down to 3.5 per cent. Both the Dow and S&P 500 finished positive, while the Nasdaq ended just slightly down.

SG

Sabana Industrial Real Estate Investment Trust posted a rise in its portfolio occupancy to 92.6 per cent as at Mar 31, up from 91.2 per cent as at Dec 31, 2022. The Reit saw strong leasing momentum backed by robust demand from third-party logistics providers between January and March this year, with significant growth in demand for the Reit’s warehouse and logistics properties, its manager said in a bourse filing on Monday (Apr 10). The Reit’s total portfolio occupancy excludes its property at 1 Tuas Avenue 4, which is undergoing asset enhancement initiatives.

Property player Centurion Corporation is disposing of a property in Seoul, South Korea, for a consideration of 21.3 billion won (S$21.5 million). The disposal is being carried out as part of a rationalisation of Centurion’s asset portfolio, it said on Monday (Apr 10). It added that it intends to “align and focus” its asset portfolio, on countries where it believes it can “expand and scale up its operations”.

Temasek will acquire an additional 41 per cent stake in Bengaluru-based Manipal Health Enterprises (MHE). Manipal did not disclose the exact value of the deal, but an insider familiar with the situation told Reuters that the Singapore sovereign wealth fund will pay about US$2 billion for the additional stake. With Temasek-owned Sheares Healthcare Group already holding 18 per cent stake in MHE, the acquisition will raise Temasek’s total stake in the hospital chain to 59 per cent, a joint statement on Monday (Apr 10) indicated.

The closing date for the mandatory unconditional cash offer for Halcyon Agri by China Rubber Investment Group, a wholly-owned subsidiary of China Hainan Rubber Industry Group, has been extended to 5.30 pm on Apr 24, the offeror said on Monday (Apr 10). China Hainan Rubber launched the offer for Halcyon Agri at S$0.413 per share in February this year. This followed a pre-conditional mandatory general offer for 36 per cent of Halcyon Agri’s shares in November last year at US$0.315 per share.

US

Tupperware tumbled as much as 43 per cent on Monday (Apr 10), the most since November, after the company said it hired financial advisers “to help improve its capital structure and remediate its doubts regarding its ability to continue as a going concern.” Tupperware is also taking action to improve its liquidity position, that include discussions with potential investors or financing partners, it said. And it is looking at its real estate portfolio for opportunities to streamline the company and have more cash on hand.

Gold prices fell on Monday (Apr 10) as the dollar firmed after the US non-farm payrolls report pointed to a tight labour market and raised the odds of another rate hike by the Federal Reserve at its May policy meeting. Spot gold was down 0.4 per cent at US$2,000.57 per ounce, as of 0041 GMT. US gold futures also slipped 0.4 per cent to US$2,017.80. The dollar index was 0.1 per cent higher, making bullion expensive for overseas buyers.

Oil prices settled lower on Monday, after rising for three straight weeks, as concern about further interest rate hikes that could curb demand balanced the prospect of a tighter market due to supply cuts from Opec+ producers. Brent crude settled down 96 cents, or 0.2 per cent, at US$84.58 a barrel while US West Texas Intermediate also fell 94, or 0.1 per cent, to US$79.74. Both benchmarks fell by more than US$1 earlier in the session.

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

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