Daily Morning Note – 12 Oct 2020

PHILLIP SUMMARY

Asian stocks looked set for a mixed start. The offshore yuan fell in early trading after Chinese policy makers acted to restrain its strength by making it easier to bet against. S&P 500 futures edged lower after the benchmark ended higher last week, with some traders betting lawmakers are moving closer to reaching an agreement on stimulus. Australian shares opened little changed and contracts in Japan were flat. Crude oil declined and gold was steady. S&P 500 futures dipped 0.2% as of 8:21 a.m. in Tokyo. The gauge rose 0.9% on Friday. Futures on Japan’s Nikkei 225 were little changed on Friday. Hang Seng Index futures rose 0.7% on Friday.

BREAKING NEWS

Hyflux has asked its Middle Eastern suitor Utico to address concerns flagged by creditor groups before a virtual townhall can be held for the water treatment firm’s perpetual securities and preference shares (PnP) investors.

Suntec Real Estate Investment Trust’s (Suntec Reit) manager is looking to acquire a half stake in London’s Nova development from Canada’s pension fund, based on an agreed property value of £430.6 million (S$766.5 million). The Nova development consists of two Grade A office blocks with ancillary retail – Nova North and Nova South – as well as The Nova Building, a primarily residential asset.

Keppel Corporation on Friday said its offshore and marine arm Keppel Offshore & Marine (Keppel O&M) has clinched a contract valued at about S$600 million from an unnamed energy company. The contract is on progressive payment terms and is not expected to have any material impact on Keppel Corp’s net tangible assets and earnings per share for the current financial year, it noted.

Mirach Energy has been granted three months more to submit an exit-offer proposal to the Singapore Exchange (SGX), its board announced on Friday. This comes as certain shareholders have expressed their intention to collectively make an exit offer to all the other shareholders of the company.

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

TECHNICAL REPORTS

Technical Analysis: Straits Time Index – Surprise gain above 2,500 sees the resilience of the STI

Analyst: Chua Wei Ren

– A buoyant Wall Street and hope of more Stimulus news spurs the hopeful Straits Time Index back into the 2,500 region in mid of last week.

– However, Friday saw prices remain strongly resisted at 2,549 region

– Overall, STI is seen trading within a range bound between 2,800 and 2,200

Technical Analysis: Hong Kong Tech – Is Hong Kong Tech sector going to have another miracle bull run?

Analyst: Chua Wei Ren

– The Hong Kong market outlook remain under perform despite a rise last Monday.

– Friday see prices slide back into negative territory with the Hang Seng Index closing at 24,119.10.

– Major technological stock closes lower on Friday as the U.S expresses interest to curbs on Ant Group and Tencent payment services.

>> Read more technical reports

RESEARCH REPORTS

Singapore Banking Monthly – Additional relief measures to ease moratorium woes

Recommendation: NEUTRAL (Maintained); Analyst: Tay Wee Kuang

– Lowest quarterly interest rates since 2014 (3M-SIBOR: 0.43%; 3M-SOR: 0.19%) expected to weigh in on NIMs for the banks in 3Q20.

– Loans growth fell for a third consecutive month (-1.03% YoY), as business loans contracted for the first time in four years (-0.04% YoY).

– MAS announced partial extension of loan moratorium for individuals and SMEs in need, allowing banks to avoid potential cliff effect of loan quality deterioration upon expiry of loan moratorium.

– Maintain the Singapore Banking Sector at NEUTRAL. Despite an expected recovery in non-interest income as the economy reopens, banks’ earnings are unlikely to reach pre-COVID-19 levels in the near term as banks continue to experience strong headwinds from low interest rates and heightened allowances.

SG Bonds Weekly – Week 42

Credit Analyst: Timothy Ang

– Starhill Global Real Estate Investment Trust obtained a three-year unsecured and committed revolving credit facility of S$40 million from UOB.

– Olam International has upsized its flagship debt facility by US$300 million to US$1.98 billion, and will use it to refinance existing loans.

– Suntec Real Estate Investment Trust’s manager is looking to acquire a half stake in London’s Nova development from Canada’s pension fund, based on an agreed property value of £430.6 million (S$766.5 million).

>> Read more research reports

You may read our Phillip 4Q20 Singapore Strategy report here.

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: (PSR) First Sponsor (Initiation), Hyphens, Sasseur, Bond Model Portfolio, FOMC and more

Date: 21 September 2020

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #25 – Prime US REIT; Initiation

For more videos on Phillip in 3 Mins

Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information





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