Daily Morning Note – 11 Febraury 2021
Asian stocks are poised to churn lower on Thursday as investors assess what the latest U.S. inflation reading means for aid prospects, and with some major markets closed for holidays. Treasuries gained. Futures slipped in Australia and Hong Kong. China is shut for the start of Lunar New Year celebrations, and Japan and South Korea are also closed. The S&P 500 Index ended virtually unchanged near its record high. The 10-year Treasury yield fell back below 1.15% after the core consumer price index was unchanged last month. The dollar dipped versus most of its largest peers following the inflation report. Oil prices nudged up.
In a business update announced on Wednesday, Singapore Telecommunications (Singtel) posted an operating revenue of S$4.24 billion for its third quarter ended Dec 31, 2020, down 3.2 per cent year on year. Meanwhile, Ebitda stood at S$1 billion in Q3, down 13.5 per cent from the year-ago period. Both figures exclude revenue from the national broadband network (NBN) migration. But on a quarter-on-quarter basis, excluding NBN migration revenue, operating revenue and Ebitda rose 9.9 per cent and 3.2 per cent respectively.
Ground-handler and in-flight caterer Sats posted a net loss of S$2.8 million for the third quarter ended Dec 31, 2020, compared with a net profit of S$59.3 million a year ago. Quarter on quarter, its net loss narrowed by S$30.4 million due to an uptick in air cargo volumes and improved contribution from overseas entities, Sats said in a business update on Wednesday.
Lendlease Global Commercial Reit (Lendlease Global Reit) on Wednesday posted a H1 distribution per unit (DPU) of 2.34 Singapore cents for the six months ended Dec 31, 2020, up 0.8 per cent from the previous year’s DPU of 2.32 cents derived from annualised results.
First Sponsor Group on Wednesday posted a 92.7 per cent plunge in net profit to S$6.9 million for its fourth quarter ended Dec 31, 2020, from S$94.9 million a year ago. This came as the mainboard-listed property developer saw its revenue slide 73.5 per cent on lower revenue from the sale of properties, rental income from investment properties, hotel operations and a decrease in revenue from property financing.
DBS is seeing encouraging signs on overall asset quality in 2021 as moratoriums gradually taper off, with extensions on debt holidays contained and delinquencies kept low. At a media briefing on Wednesday, DBS chief Piyush Gupta projected for total allowances over 2020-2021 to come in at the middle of the S$3-5 billion range as loans under moratorium have come down significantly from their respective peaks.
General Motors on Wednesday reported fourth-quarter earnings that easily beat Wall Street expectations, but the company warned that a global semiconductor chip shortage could cut its earnings by $2 billion this year. Automakers and parts suppliers began warning of the shortage late last year after demand for vehicles rebounded more strongly than expected following a two-month shutdown of production plants due to the coronavirus pandemic.
Coca-Cola said Wednesday the coronavirus pandemic is still hurting its sales, but cost-cutting efforts helped it top analysts’ earnings estimates. The company also released its first forecast since the crisis hit its business. Analysts appear to be more optimistic than the soft-drink company about the speed of its recovery.
Under Armour on Wednesday reported a surprise profit for the holiday quarter, with sales boosted by strong digital growth and expenses kept in check. The retailer has been one key beneficiary during the Covid pandemic, along with Nike and Lululemon, of more consumers looking for athletic apparel to wear for at-home workouts or just around the house.
Twitter’s stock was up slightly in after-hours trading on Tuesday after the company reported its fourth-quarter earnings, as the company beat Wall Street’s earnings and revenue expectations. But the company failed to meet Wall Street’s user growth expectations.
Ford Motor plans to invest $29 billion in electric and autonomous vehicles through 2025, the company announced Thursday when it reported better-than-expected fourth-quarter earnings. Wall Street was waiting to see Ford pour more money into the emerging technologies after General Motors announced plans last year to increase spending on all-electric and autonomous vehicles to $27 billion between 2020 and 2025.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
ComfortDelGro Corp Ltd
Analyst: Chua Wei Ren
Recommended Action: Technical SELL
ComfortDelGro Corp (SGX: C52) downside is set to move lower based on the technical indicated.
Fraser Logistic & Commercial Trust
Analyst: Chua Wei Ren
Recommended Action: Technical SELL
Fraser Logistic & Commercial Trust (SGX: BUOU) bullish upside has come to an end after Fraser Logistic and Commercial Trust achieved our first target price at $1.56 based on our report on 6th Jan 2021. However, prices reverse strongly at $1.56 level and technical indicate that the sell-off will continue.
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Date: 8 February 2021
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