DAILY MORNING NOTE | 11 December 2023

**Do note that the last day of Morning Note Issuance will be on 14 December 2023. Morning Note will resume in January 2024**


Summary of Trades Initiated in Past Week

Factsheets


Week 50 Equity strategy – S&P500 rallied to reach a new high for 2023 on Friday, after the release of non-farm payroll employment report confirms a slowdown in the pace of job gains, in particular in the private sector. This supports the expectation of no rate hike when FOMC meets on Wed for the last time this year.

China reported first YoY export growth since April 2023, though this was helped by low base. Exports rose 0.5% YoY (Oct: -6.6%). However, imports contracted by 0.6% YoY, from 3.0% growth in Oct. A significant drag is crude oil imports, which had its first YoY decline since April, reflecting high inventory and a still weak domestic economy. Notably, growth of mobile phone exports rose 54% YoY, with increase in shipment volume. Other IT exports also turned in positive growth, and IT component imports returned to positive growth after 19 months of decline, lending weight to the view that a tech recovery is shaping up. This should support improvements in orders in the tech supply chain.

Peggy Mak
Research Manager
peggymak@phillip.com.sg


Singapore shares ended Friday (Dec 8) in the black, with the index gaining 1.2 per cent or 36.47 to 3,110.73. Across the broader market, advancers led decliners 357 to 215, as 1.3 billion shares worth S$847 million changed hands.

Wall Street stocks rose Friday after solid jobs data gave a reassuring picture of the economy, lifting the market to weekly gains. The US economy added 199,000 jobs in November, while the jobless rate ticked down to 3.7 percent from 3.9 per cent, according to Department of Labor figures, better than analyst expectations.

Top gainers & losers

Factsheets


EVENTS OF THE WEEK

Factsheets


SG

Keppel DC Real Estate Investment Trust’s manager said that the data centre-focused Reit has issued S$90 million of floating rate notes due 2026. The notes come with an interest rate based on the compounded daily Singapore Overnight Rate Average plus an agreed spread.

Genting Singapore’s Resorts World Sentosa has been slapped with financial penalties of S$2.25 million for lapses in performing customer due diligence measures for certain transactions for three years from December 2016.

Ossia International has garnered the Singapore Exchange’s (SGX) approval to exit the watch list from Dec 11, 2023, the luxury-goods retailer and distributor said in a regulatory filing on Friday (Dec 8).

Singapore’s integrated real estate and healthcare company Perennial Holdings has launched its eldercare, medical and hotel brands in its S$1 billion, first “one-stop” healthcare-centric transit-oriented development in Tianjin.

Indonesia’s biggest tech firm GoTo Gojek Tokopedia said on Friday (Dec 8) it was in talks with short video app TikTok over a potential e-commerce partnership in the South-east Asian country.

DBS will contribute S$30 million to two projects over the next three years to improve the livelihoods of lower-income families with children living in rental flats. This is the first initiative that comes under the bank’s S$1 billion pledge made in August to uplift vulnerable segments of society over the coming decade.


US

Wall Street stocks rose Friday after solid jobs data gave a reassuring picture of the economy, lifting the market to weekly gains. The US economy added 199,000 jobs in November, while the jobless rate ticked down to 3.7 percent from 3.9 per cent, according to Department of Labor figures, better than analyst expectations.

Oil prices rose more than 2% on Friday after US data supported expectations of demand growth, but both benchmarks fell for a seventh straight week, their longest streak of weekly declines in half a decade, on lingering oversupply concerns.

China’s aviation regulator’s deputy head on Friday (Dec 8) told a Boeing executive in Beijing the airplane maker was welcome to deepen its development in the Chinese market.

Apple on Saturday (Dec 9) said it shut down third-party applications that enabled Android devices to use the iMessage service to communicate with iPhone users. The iPhone maker said it “took steps to protect our users by blocking techniques that exploit fake credentials in order to gain access to iMessage”.

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


RESEARCH REPORTS

FAANGM Monthly: Nov 23 – Lower treasury yields pushing FAANGM higher

Recommendation: OVERWEIGHT (Maintained); Analysts: Jonathan Woo, Zane Aw, Phillip Research Team

– FAANGM had its 3rd best month of the year (+10.2%), driven by falling treasury yields (-60bps MoM) and market expectations of quicker rate cuts. The Nasdaq was +10.7%, while the S&P 500 was +8.9%.

– NFLX (+15.1%) was the biggest gainer of the month due to positive earnings momentum and healthy ad-supported user trends. GOOGL (+6.8%) was the main laggard as price began to consolidate following poor Cloud growth.

– FAAANGM valuations still remain attractive even after a rebound in November. Digital advertising continues to recover over the festive period, with e-commerce spending still resilient. The biggest near-term headwind remains soft demand for tech hardware. We maintain an OVERWEIGHT recommendation on FAANGM.

PSR Stocks Coverage

Factsheets

Factsheets


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