Daily Morning Note – 11 June 2021
PHILLIP SUMMARY
Asian stocks look set for a steady open Friday after U.S. shares and Treasuries rallied as investors judged that a jump in inflation is likely to be transitory, leaving scope for ongoing central-bank support. Equity futures were little changed in Japan and Australia, and higher in Hong Kong. The S&P 500 Index climbed to a record overnight and a rally in technology heavyweights boosted the Nasdaq 100. The 10-year Treasury yield fell to 1.43%, its lowest point since March, after a brief jump following a report showing above-forecast gains in U.S. consumer prices. The dollar weakened. The CPI increase in May was driven largely by categories associated with a broader reopening of the economy, as vaccinations bring the pandemic under control. Despite some signs of wider price pressures, concerns about a spike in longer term borrowing costs that could destabilize global markets have eased.
BREAKING NEWS
SG News
The Straits Trading Company,on Thursday announced that its subsidiary, Malaysia Smelting Corporation (MSC), has temporarily suspended its tin mining and smelting operations in Malaysia from June 4 to 14 pursuant the country’s Movement Control Order 3.0. This is expected to impact MSC’s operations and financial performance for the fiscal year ending Dec 31, 2021 – although the company “is unable to ascertain the extent of the impact” at this juncture, according to MSC in a copy of its June 9 announcement filed with the Singapore Exchange.
Advanced Systems Automation has agreed to fully acquire a video gaming company, Excelgames Interactive Asia Holdings, for a base consideration of S$120 million in a transaction that will constitute a reverse takeover (RTO) upon completion. This comes after Advanced Systems’ Feb 27, 2021 announcement that it would dispose of certain subsidiaries, after which it will cease to hold any operating businesses and become a cash company.
Keppel Infrastructure Trust (KIT) will make an additional arbitration provision of S$23.8 million for its Australian subsidiary Basslink. This is on top of the S$76.2 million provisions the trust made for the fiscal year ended Dec 31, 2020, the trustee-manager said on Thursday in a bourse filing. Basslink, which runs an undersea electricity cable in Australia’s Tasmania, advised KIT of the arbitrator’s decision on costs for three arbitrations to resolve disputes over a cable failure in December 2015.
Dining-in at food and beverage (F&B) establishments for groups of up to five people will be allowed to resume from June 21, if the Covid-19 situation in Singapore remains under control in the coming weeks, the multi-ministry taskforce on Covid-19 said at a press conference on Thursday.
US News
Prices paid by US consumers rose in May by more than forecast, extending a months-long buildup in inflation that risks becoming more established as the economy strengthens. The consumer price index climbed 0.6 per cent from the prior month after a 0.8 per cent jump in April that was the largest since 2009. Excluding the volatile food and energy components, the so-called core CPI rose by a larger-than-forecast 0.7 per cent, according to Labor Department data Thursday. The gains were fairly broad and driven by steady growth in the costs of used vehicles, household furnishings, airfares and apparel. The median forecast in a Bloomberg survey of economists called for 0.5 per cent gains in both the overall CPI and the core.
Vertical Aerospace, an electric vertical takeoff and landing aircraft (eVTOL) maker backed by investors such as American Airlines (AAL.O), will go public through a merger with a blank-check firm in a deal valued at $2.2 billion, the company said on Thursday. Vertical Aerospace said it has pre-orders for up to 1,000 eVTOL aircraft with launch customers Avolon and American Airlines, along with a pre-order option from Virgin Atlantic, all valued at up to $4 billion.
Procter & Gamble Co’s freight and commodity costs have amounted to around $600 million after tax so far this fiscal year, its chief financial officer said at a conference on Thursday. The company had previously said it expected more than $200 million in freight costs and about $125 million in commodity costs after tax for the fiscal year ended May 2021.
Apple released several new augmented reality tools and technologies for software makers during its annual WWDC conference this week. These technologies could be vital if Apple in fact releases an augmented reality headset or glasses in coming years..
Chinese ride-hailing giant Didi Chuxing on Thursday filed to go public in what could be one of the largest tech IPOs of this year, positioning large shareholders Uber and SoftBank for a win. The company reported $21.6 billion in revenue last year. It also posted a profit this past quarter on $6.4 billion in revenue. Specifically, the company reported net income of $837 million before certain payouts to shareholders, and comprehensive net income of $95 million for the quarter.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
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