Daily Morning Note – 12 November 2020

PHILLIP SUMMARY

European shares rose for a third straight day on Wednesday as optimism around a potential Covid-19 vaccine and encouraging comments from European Central Bank chief Christine Lagarde offset worries of economic damage from surging infections. The pan-European Stoxx 600 jumped 1 percent, building on a 6 percent rally this week as investors bought into utilities as well as travel-related stocks, a sector that has widely underperformed this year.

Technology stocks, which have tracked a surge in their US counterparts since the coronavirus-driven crash in March, gained 2 per cent.

The benchmark Stoxx 600 has surged nearly 45 per cent since March, thanks partly to historic global stimulus, but it is still down 6.5 per cent on the year as the resurgence in Covid-19 cases threatens a nascent economic recovery.

By comparison, the US benchmark S&P 500 has risen nearly 10 per cent this year and was propelled to record highs this week after drugmaker Pfizer Inc said its Covid-19 vaccine was 90 per cent effective.

BREAKING NEWS

The board of the manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust on Wednesday said it is considering the requisition notice from Quarz Capital and Black Crane Capital and seeking legal advice, adding that it will make further announcements on SGXNet in due course.

Fraser and Neave (F&N) on Wednesday posted a 2.1 percent dip in net profit to S$149.2 million, as revenue also fell 3.6 percent to S$1.8 billion for its full-year ended Sept 30. Its revenue was hit by lower volumes from its soft drinks and publishing businesses, it said.

UOL Group on Wednesday said headwinds remain, although its retail portfolio’s committed occupancy remains stable, with average daily footfall in the third quarter having recovered to 54 percent of pre-Covid levels. In the first nine months of 2020, shopper footfall fell 43.1 percent from the levels in the year before. Committed occupancy at the end of September was 93.5 percent, from 94.4 percent at the end of June.

SBS Transit on Wednesday posted a 3.3 percent dip in post-tax profit to S$19.36 million for its third quarter ended Sept 30. Without the Covid-19 government reliefs, it would have recorded an operating loss of S$4.04 million. Revenue for the quarter fell 17 percent to S$301.99 million, mainly due to lower service fees, lower rail ridership and lower advertising revenue.

Jiutian Chemical Group on Wednesday posted another record set of results – a Q3 attributable net profit of RMB51.9 million (S$10.5 million) for the three months ended Sept 30, compared to just RMB2.4 million a year ago. This was also a significant jump from its RMB32.6 million net profit reported in the preceding quarter – in itself a record quarterly net profit since the firm was listed in 2006.

Best World International on Wednesday posted a 13.7 percent increase in its third-quarter net profit to S$28.2 million, as revenue for the three months ended Sept 30 rose 14.8 per cent to S$131.3 million. This was helped to an extent by lower cost of sales, largely due to lower import duties incurred in China from the temporary preferential custom duty rates obtained by the Hunan branch of its China subsidiary; this resulted in a substantially lower custom duty rate for the quarter, it said. Earnings per share rose to 5.19 Singapore cents for the quarter, compared to 4.56 cents a year ago.

DBS Private Bank (PB) is recording a strong response to its family-office services as the pandemic drives greater awareness of the need for wealth structuring, tax planning and philanthropic outreach. Since the unit was established last year, the number of these privately held companies managing the wealth and investments of wealthy families which it has helped set up has more than doubled; assets under management (AUM) have grown by 40 percent.

Global oil benchmark Brent rose on Wednesday, briefly touching a more than two-month high above US$45 a barrel on hopes of a Covid-19 vaccine that could boost demand and later pulling back as concerns about rising cases overtook bullish news. Brent settled up 19 cents, or 0.4 percent, at US$43.80 a barrel, after earlier trading at a session peak of US$45.30 – the first time it has cleared the US$45 threshold since early September. US West Texas Intermediate (WTI) crude settled up 9 cents at US$41.45, after setting a session high of US$43.06.

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

TECHNICAL REPORTS

Keppel DC REIT

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Keppel DC REIT (SGX: AJBU) bullish outlook is resuming based on the technical, after a period of consolidation.

Mapletree Industrial Trust

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Mapletree Industrial Trust (SGX: ME8U) bullish outlook is set to continue despite a continuation of selling the past 2 days and technical is showing signs of a bullish return.

>> Read more Technical reports

RESEARCH VIDEOS

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Market Outlook: (PSR) StarHub, Banks & REIT Results, Banking Monthly, Credit Commentary, SG Weekly & more

Date: 09 November 2020

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