Daily Morning Note – 11 January 2022
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PHILLIP SUMMARY
Asia stocks looked set to slip Tuesday after the S&P 500 closed lower for a fifth session, though a late U.S. rebound may tame losses.
Australian shares edged lower. Futures pointed to a modest decline in Hong Kong and Japan, which reopens after a holiday. U.S. contracts traded steady after the S&P 500 posted its longest losing streak since September, though dip buyers emerged to wipe out almost all its losses after sinking 2%. The Nasdaq 100 ended in the green after sliding as much as 2.7%.
The U.S. Treasury curve flattened as short-dated yields rose sharply with market-implied odds of a March rate hike edging higher. Goldman Sachs Group Inc. predicted four hikes this year, beginning that month. The dollar rose.
A key measure of U.S. inflation — set to be released Wednesday — is anticipated to have increased further in December, putting additional pressure on the central bank to tighten policy.
BREAKING NEWS
SG
Transport operator ComfortDelGro on Monday (Jan 10) said its subsidiary, ComfortDelGro MedCare (CDG MedCare), has entered into a sale and purchase agreement with Neo Lay Kim and Ng Chew Chuah to acquire a 90 per cent stake in Ming Chuan Transportation for S$8.5 million. Founded in 2004, Ming Chuan Transportation provides transport services for passengers with limited mobility, with a fleet of 76 specialised vehicles. The acquisition will allow CDG MedCare to expand its specialised medical escort and transport services for the elderly and persons with mobility needs, said ComfortDelGro. Upon completion of the acquisition, CDG MedCare will have a total fleet of 92 vehicles, cementing its position as the largest wheelchair transport service provider in Singapore, the company added.
EC World Reit has received a notice of compulsory expropriation of Fu Zhuo Industrial, a port property located in Hangzhou, China, its manager said on Monday (Jan 10). The People’s Government of Linping District, Hangzhou City had issued the real estate investment trust (Reit) with the notice on Jan 6 for the development of the Grand Canal National Cultural Park in Hangzhou. Fu Zhuo Industrial is located on the east bank of the Beijing-Hangzhou Grand Canal, in the west of Chongxian New City in Hangzhou.
ESR-REIT’s trustee RBC Investor Services Trust Singapore has entered into an agreement with Tat Seng Packaging Group Tat Seng Pkg: T12 0% to divest an industrial building at 28 Senoko Drive for S$12 million. The price tag represents an 8.4 per cent discount to the property’s fair value of S$13.1 million, said the manager of ESR-Reit ESR-REIT: J91U -2.06% in a press statement on Monday (Jan 10). The industrial building was acquired in 2007 at S$12 million. The net proceeds will be used to repay outstanding borrowings and/or fund upcoming asset enhancements, potential acquisitions, unit buy-back and general working capital requirements.
Singapore Telecommunications Ltd is considering options including a potential stake sale in the fibre assets of its Australian subsidiary SingTel Optus Pty, people familiar with the matter said, of a deal that would follow last year’s disposal of its mobile phone towers unit. Singtel, as the Singaporean phone-services provider is known, has held talks with potential advisers to prepare for a strategic review of the Australian fibre business, the people said, asking not to be identified because the information is private. Options for the assets, which could be worth a few billion dollars, include a potential stake sale, partnership with an investor or a sale and lease back, the people said. Deliberations are preliminary and there is no certainty that the review will lead to a transaction, the people said.
The lab-grown diamond market has “strong potential” given that consumers today are more concerned about the environmental, sustainability and ethical impacts of mined diamonds, said Catalist-listed Metech International on Monday (Jan 10). The company was responding to shareholders’ queries about its lab-grown diamond business ahead of its upcoming extraordinary general meeting on Jan 11. Metech added that in a bid to attract consumers, the price points of lab-grown diamonds will be lower than mined ones. This is possible thanks to the lower production costs of lab-grown diamonds. It also a more sustainable way of producing diamonds, said Metech.
US
Moderna Inc said it has signed vaccine purchase agreements worth US$18.5 billion for this year, along with options for another US$3.5 billion, including booster shots. In a statement on Monday, the company also said 2021 product sales would be US$17.5 billion, slightly higher than the average analyst estimate of US$17 billion, according to data compiled by Bloomberg. Additionally, the company said that it shipped 807 million vaccine doses in 2021. Previously, it had said it would deliver between 700 million and 800 million doses.
Pfizer CEO Albert Bourla on Monday said a vaccine that targets the omicron variant of Covid will be ready in March, and the company’s already begun manufacturing the doses. “This vaccine will be ready in March,” Bourla told CNBC’s Squawk Box. “We (are) already starting manufacturing some of these quantities at risk.” Bourla said the vaccine will also target the other variants that are circulating. He said it is still not clear whether or not an omicron vaccine is needed or how it would be used, but Pfizer will have some doses ready since some countries want it ready as soon as possible.
Chinese e-commerce giant JD.com has opened two retail stores in the Netherlands that it says will be manned with robots preparing and delivering packages. The “robotic shops,” branded Ochama, are located in the cities of Leiden and Rotterdam and mark JD.com’s first foray into Europe with bricks and mortar locations. It highlights the Chinese giant’s ambitions to expand beyond China. JD.com’s entry into Europe marks the start of a potential challenge to U.S. e-commerce giant Amazon, which has launched its own cashierless grocery stores called Amazon Go in the U.S. and U.K.
Top chipmaker TSMC notched a new quarterly sales record at the end of 2021 boosted by continued demand from top clients including Apple and Qualcomm for semiconductors. The Taiwanese foundry, which manufacturers chips for other companies, reported December revenue of 155.38 billion new Taiwan dollars (about $5.6 billion) — a record number for a single month, and up 4.8% from November. For the fourth quarter, revenue totaled 438.18 billion new Taiwan dollars. That’s the sixth straight quarterly sales record TSMC has recorded.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Technical Pulse: Alphabet Inc.
Recommended: Technical BUY; Analyst: Chua Wei Ren
Alphabet Inc (US: GOOGL) Despite a stop-out on 10th January 2022 based on our report dated 3rd December 2021, technicals indicate that the bullish upside is set to return
Buy spot: 2773.39 Stop loss: 2600.00 Take profit 1: 3000.50 Take profit 2: 3151.41
Technical Pulse: Tesla Inc.
Recommended: Technical BUY; Analyst: Chua Wei Ren
Tesla Inc (US: Tesla) Technical price action indicates a bullish return
Buy spot: 1058.12 Stop loss: 900.00 Take profit 1: 1244.50 Take profit 2: 1300.40
Technical Pulse: TravelSky Technology Limited
Recommended: Technical BUY; Analyst: Chua Wei Ren
TravelSky Technology (HKEX: 696) upside is returning based on technicals
Buy stop: 14.00 Stop loss: 11.80 Take profit 1: 17.00 Take profit: 19.50
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