Daily Morning Note – 12 January 2021

PHILLIP SUMMARY

Asian stocks looked set for a muted start Tuesday after U.S. stocks fell for the first time in five sessions with equity prices near all-time highs. The dollar strengthened against all its major peers. Futures pointed lower in Japan, where markets reopen after a holiday, and Hong Kong. The S&P 500 was led lower by the real estate and consumer discretionary sectors, while energy companies were the biggest gainers.

Ten-year Treasury yields climbed to almost 1.15%, the highest level since March. Commodities were broadly lower on the back of the stronger dollar, with West Texas Intermediate oil trading near $52 a barrel.

BREAKING NEWS

A term sheet for Singapore Airlines’ (SIA) first US dollar bond has been circulated by bookrunners for the potential issue, and calls were being held with prospective investors yesterday, according to the document seen by Reuters. The size of the deal will be determined today following briefings with investors in Asia and Europe, two sources with direct knowledge of the matter said. SIA had in the past carried out debt deals in Singapore dollars rather than US dollars. The deal will not be offered to investors based in the United States, according to the term sheet.

CapitaLand Retail China Trust (CRCT) has inked a deal to sell real estate in Wuhan for 258 million yuan (S$52.6 million) in cash, the manager said on Monday. The trust is selling CapitaMall Minzhongleyuan and three sets of vacant premises to an unrelated third party, which has also agreed to pay an extra 200 million yuan to cover a shareholder loan and entrustment loans. The Minzhongleyuan property had been “facing operational challenges in the past few years”, said the CRCT manager, citing factors such as road works in the area. The manager also noted that the agreed interest price is 3.9 per cent more than the combined book value of the vacant premises and an independent valuation of the mall.

Electronics services provider AEM Holdings has launched a S$99.7 million buy-out bid for contract manufacturer CEI Ltd, in a voluntary conditional offer on Monday. Citing business synergy, mainboard-listed AEM is offering S$1.15 in cash, or a mix of cash and new AEM shares, for each ordinary share in mainboard-listed CEI. The offer price marks a premium of 26.1 per cent volume-weighted average price of CEI shares in the 12 months to Jan 8. CEI closed at S$1.00 on Monday, up by S$0.01 or 1.01 per cent, while AEM ended higher by S$0.02 or 0.55 per cent, at S$3.67.

Singapore Exchange Regulation (SGX RegCo) is considering to launch a consultation on special purpose acquisition companies (Spacs), possibly as early as this quarter, given the current popularity of such a listing structure. In a media briefing on Monday, SGX RegCo chief executive officer Tan Boon Gin said the exchange has noticed the popularity of Spacs listings in other markets. Spacs, also known as blank-cheque companies, are shell companies which raise capital through an initial public offering for the purpose of acquiring an existing firm.

Catalist-listed offshore support vessel operator Vallianz Holdings sold off a wholly-owned subsidiary for US$1 on Dec 31, it disclosed a week and a half later. Loss-making crew management unit Offshore Engineering Resources was sold on a willing buyer, willing seller basis – without a valuation exercise – to an unrelated third party, the Vallianz board said in a bourse filing on Monday. The unit and its two 99 per cent-owned subsidiaries had together rung up an interim net loss of US$324,000 for the nine months to Dec 31, 2020, with unaudited net tangible liabilities of some US$20,000 as at the same date, Vallianz noted in its statement.

OCBC has launched a consumer loan for landed property homeowners looking to install solar panels on their homes. The loan facility, which is Singapore’s first, provides these owners with a term-financing option for installing solar panels, defraying upfront costs to enable and accelerate clean energy adoption, the bank said in a press statement on Monday. Each homeowner can borrow up to S$30,000 with a tenure of between one and five years to allow for greater flexibility on the repayment period, it added.

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

TECHNICAL REPORTS

Ascendas REIT

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Ascendas (SGX: A17U) technical indicate that there is a sign of a renewed bullish upside after a continuations sell off of the REIT since August 2020.

Pinduoduo Inc

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Pinduoduo Inc (US: PDD) Technical indicate a continuation of the bullish rally after a surprise opening gap to the downside and the high on Monday has filled the gap.

Palantir Technologies Inc

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Palantir Technologies Inc (US: PLTR) has been consolidating since November 2020 after reach its peak at US$33.50. Technical has also further indicate that the bullish upside is set to continue

>> Read more Technical reports

RESEARCH REPORTS

SG Bonds Weekly – Week 2

Credit Analyst: Timothy Ang

– 2020 review: Philippines, Malaysia and Singapore saw the biggest percentage increase in bond issuance YoY at 160%, 125% and 76% respectively.

– Great Eastern Holdings on Wednesday said that Great Eastern Life Assurance Company will be redeeming early all S$400 million of 4.6 per cent subordinated notes due 2026 but callable in 2021.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

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Market Outlook: (PSR) Keppel (Int.), Dasin, Yoma, SG Banking Monthly, Airbnb IPO & SG Weekly

Date: 07 December 2020

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