Daily Morning Note – 12 June 2020

PHILLIP SUMMARY

Asian stocks looked set to slump after U.S. equities tumbled the most in 12 weeks, as worries over a jump in coronavirus cases added to concern the recent rally had gone too far. Treasuries surged with the dollar. Futures in Japan, Hong Kong and Australia were all at least 2% lower. Earlier, the S&P 500 sank almost 6% and only one company in the index finished higher.

Airlines, cruise and travel shares that soared in recent weeks bore the brunt of the selling. The KBW Bank Index of financial heavyweights slid 9%, and energy producers joined a rout in oil. The yen pushed higher and the euro retreated. Elsewhere, crude oil tumbled almost 9% amid Thursday’s large moves in global markets. European shares slumped.

BREAKING NEWS

A group of bank lenders is seeking to put Hyflux under judicial management (JM), after two years of a court-sanctioned restructuring process that has continued to leave creditors empty-handed. An unsecured working group (UWG) of banks comprising Bangkok Bank, BNP Paribas, CTBC Bank, Mizuho, KfW, Korea Development Bank and Standard Chartered Bank plans to revive an earlier application to be carved out of Hyflux’s debt moratorium, a Singapore High Court heard during Hyflux’s case management conference on Thursday.

Chinese property developer Yanlord Land Group recorded 18.92 billion yuan (S$3.71 billion) in total contracted presales from residential units, commercial units and car parks for the first five months of the year, a 68.4 per cent increase over last year, it said in a bourse filing late on Wednesday. The presales were for a contracted gross floor area of 526,746 square metres (sq m) – 41.8 per cent higher than the same period last year.

Starhill Global Real Estate Investment Trust (Starhill Global Reit) on Thursday said its upcoming distribution to unitholders for the six months leading up to June 30 (H2 FY2019/20) is expected to be below 90 per cent of its taxable income this year. The group intends to use the Singapore government’s tax transparency extension to “prudently manage cash flow and maintain financial flexibility” in the interest of unitholders amid the Covid-19 crisis, it said in a statement.

China’s No. 2 online retailer JD.com raised HK$30.1 billion (S$5.4 billion) in its Hong Kong share sale, sources familiar with the matter said, cementing the world’s second-biggest listing this year. The company priced 133 million new shares at HK$226 each, according to the sources, who asked not to be identified as the information is not public.

Mainboard-listed United Overseas Insurance (UOI), a subsidiary of United Overseas Bank, on Thursday said growing premiums for the year would be “challenging” amid the Covid-19 crisis and global recession. Claims experience is also expected to worsen due to the ongoing pandemic, it said, in response to shareholder queries. However, even with some travel claims having been lodged in the first quarter, UOI said that these are not expected to have a “significant” impact on the group’s underwriting result for the financial year ending Dec 31, 2020 (FY2020).

Singapore Telecommunications (Singtel) is part of a consortium of companies that is building a high-performance submarine cable connecting the Republic, Japan, the Philippines, Thailand, Vietnam and China (Hong Kong and Guangdong province), the telco said on Thursday. The 9,400-kilometre cable will feature multiple pairs of optical fibres and is designed to carry more than 140 Terabits per second of traffic, enabling high-capacity transmission of data across East and South-east Asia.

Malaysia’s glove maker Top Glove has had a banner quarter that ended May 31, with its financial performance hitting record highs. After-tax profit jumped 365 per cent to RM350 million (S$114.1 million), while revenue rose 42 per cent to RM1.69 billion. The dual-listed company in Singapore and Malaysia attributed the most outstanding performance in its 29-year history to “unparalleled growth in sales volume, on the back of the global Covid-19 pandemic”.

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

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