Daily Morning Note – 11 June 2020

PHILLIP SUMMARY

Stocks in Asia looked set to drop as investors assessed the Federal Reserve’s forecast of a long road to economic recovery and loose monetary policy. Treasuries rose and the dollar extended this month’s slide. Futures were lower in Japan, Hong Kong and Australia. In a volatile session earlier, the S&P 500 closed lower as Jerome Powell suggested the pandemic could inflict longer-lasting damage on the economy, even as the Fed signalled it would keep rates near zero — possibly for years to come.

Treasury 10-year yields sank to as low as 0.72%, while the dollar extended its June slide to 2.5%. The Nasdaq 100 climbed to a record high as Tesla topped $1,000, while gold rose.

BREAKING NEWS

Mainboard-listed China Everbright Water has cancelled a proposed 1.2 billion yuan (S$235.5 million) first tranche issuance of medium- term notes in light of “recent volatile conditions” in the Chinese bond market, it said in a bourse filing late Tuesday night. It added that the move was to control financing costs. The company will continue to monitor market conditions and update shareholders in due course, it said.

Wing Tai Properties, the Hong Kong associate of Singapore-listed Wing Tai Holdings, on Wednesday guided for a first-half consolidated loss for the six months ending June 30. In the year-ago period, there was a consolidated profit of HK$245.4 million (S$43.9 million), said Wing Tai Properties in a profit-guidance note. The preliminary estimation was made mainly due to the possibility of an “adverse change” in fair value of the group’s investment properties, and the possibility of an “adverse change” in fair value of financial instruments, said the group.

Property and construction player Chip Eng Seng on Wednesday announced that its subsidiary CES-Precast (CESP) will acquire the remaining unexpired leasehold estate in an industrial building in Tuas. The S$25 million acquisition comes as part of the group’s plans to diversify its businesses amid the Covid-19 fallout. CESP had exercised the option granted by Concrete Innovators to aquire the property at 65 Tech Park Crescent, and has paid a deposit of S$1 million, in addition to the option fee of S$250,000.

Geo Energy Resources announced Wednesday that it has received approval from the Indonesian Government to increase its work plan and budget production quota for its PT Sungai Danau Jaya (SDJ) and PT Tanah Bumbu Resources (TBR) coal mines to 12 million tonnes from 8 million tonnes in 2020. The increase in its production quota is in line with the company’s mining plan schedule, as previously disclosed in its independent qualified person’s report as at Dec 31, 2019.

New private home sales jumped 74.7 per cent to 484 units in May from 277 units in April as stay-home buyers zoomed in onscreen to their dream home, drawn by discounts, low rates, affordability. Despite a full month of circuit breaker amid a relentless barrage of layoff and wage cut news, buyers were not deterred as they picked more affordable homes, according to Christine Sun, OrangeTee & Tie, head of research & consultancy. Including executive condominiums (EC) – a public-private housing hybrid – developers sold 509 units in May, up 73.7 per cent from 293 units in April, said Ms Sun

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

TECHNICAL PULSE

Genting Singapore Ltd

Recommended Action: Technical SELL

Genting Singapore (SGX: G13) upside rally has paused since prices broke out of the consolidated range in early June. The upside was limited as the technicals are displaying signs that the bulls are lacking the momentum. The share price is poised to correct downwards

>> Read more technical reports

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Market Outlook: (PSR) Dasin Retail Trust, Penguin International Limited, SingTel, SG Banking Monthly, SG Weekly, SGD Perpetual Bonds, Technicals

Date: 08 June 2020

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