Daily Morning Note – 13 January 2022

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PHILLIP SUMMARY

Asia stocks look set to open steady after a U.S. inflation print left intact expectations for interest-rate increases already priced into the market. The dollar sank.

Australia’s shares edged up at the open. Futures slipped in Japan and rose in Hong Kong. U.S. futures were little changed after commodity and retail companies led gains in the S&P 500. Tesla Inc. and Google’s parent Alphabet Inc. paced a rally in megacaps.

A gauge of the dollar had its worst session since May as the consumer price index accelerated at the fastest pace since 1982, in line with forecasts.


BREAKING NEWS

SG

Fortress Minerals has reported earnings of US$2.8 million ($3.8 million) for the 3QFY2021 ended Nov 30, 2021. Earnings per share (EPS) for the quarter stood at 0.57 cents, down 34.5% y-o-y from 0.87 cents during the same period last year. However, revenue for the 3QFY2021 grew 7.5% y-o-y to US$11.0 million on the back of higher sales volume. In the 3QFY2021, sales volume grew 35.3% y-o-y to 126,131 dry metric tonnes (DMT), reflecting resilient demand from regional markets and higher production volume achieved. The increase was partly offset by a lower average realized selling price of US$87.44 per DMT, which fell 20.6% y-o-y due to the weakening of the average benchmark IODEX CFR North China of Platts Daily Iron Ore Assessments.

Pan-United Corporation and Shell Eastern Petroleum have signed a memorandum of understanding (MOU) on Jan 12 in a bid to explore decarbonisation solutions in the construction and urban solutions industries. The collaboration is expected to create benefits in terms of decarbonisation in the built environment by creating possible new business models and market opportunities. The three-year MOU is the first of its kind between both companies, and it outlines the joint effort to identify opportunities in areas including low-carbon and renewable energy products, electric mobility solutions and other digitalisation-enabled solutions.

Mainboard-listed Qian Hu Corporation has managed to post a profit for the half year to December 2021, reversing a net loss a year ago. The fish vendor, in a regulatory filing on Wednesday (Jan 12), posted earnings of about S$863,000 for the second half of FY2021, compared to a loss of S$927,000 for H2 FY2020. But its top line dropped marginally to S$40.3 million from S$42 million, as there were no backlog orders to be delivered in H2 FY2021. Qian Hu was severely hit when air traffic was curtailed in H1 FY2020 as the pandemic started to unfold.

Singhaiyi will delist after obtaining regulatory approval on Wednesday (Jan 12), as its free float has dropped to under 10 per cent, with the date to exit the mainboard to be announced. In a regulatory filing, the property player said the Singapore Exchange (SGX) has no objection to its proposed privatisation as its controlling shareholders’ voluntary unconditional cash offer has secured 95.8 per cent valid acceptances, leaving less than 10 per cent of the shares now held by the public. SingHaiyi’s controlling shareholders Gordon and Celine Tang made the privatisation offer last November for S$0.117 per share in cash and indicated their intention to exercise their right of compulsory acquisition.

Singapore Airlines is aiming to raise US$500 million to US$750 million in a US dollar bond deal, according to 2 sources with direct knowledge of the matter. The sources could not be named as the information was not yet made public. Singapore Airlines did not immediately respond to a request for comment. The airline has mandated banks to work on the transaction and will start briefings with investors about the deal on Tuesday (Jan 11), a term sheet seen by Reuters showed. Citigroup and DBS are leading the transaction, with BNP Paribas and Standard Chartered as book runners, the term sheet showed.

US

Inflation plowed ahead at its fastest 12-month pace in nearly 40 years during December, according to a closely watched gauge the Labor Department released Wednesday. The consumer price index, a gauge that measures costs across dozens of items, increased 7%, according to the department’s Bureau of Labor Statistics. On a monthly basis, CPI increased 0.5%. Economists surveyed by Dow Jones had been expecting the measure to increase 7% on an annual basis and 0.4% from November.

The PC market grew 14.8% in 2021, shipping the largest number of desktops, laptops, and workstations in a single year since 2012, according to new data from IDC, a research firm. 2021 shipments were up over 34% from the industry’s low point in 2017 to 349 million units, according to preliminary data provided by IDC. It’s a noteworthy recovery for a sector that had been written off by technology investors and operators as a sleepy field in decline as recently as a few years ago as smartphones became the most important and highest-volume product in the electronics business.

Tesla co-founder JB Straubel, founder and CEO of battery-recycling company Redwood Materials, has good news and bad news for those who believe electric vehicle sales are primed to take off. Straubel says demand is picking up, but the auto industry isn’t moving fast enough for production to keep up. “This is catching people a bit off-guard,” Straubel told CNBC during an interview on TechCheck. “It’s a really strong shift. All the way from internal combustion sales dropping to EV sales increasing by almost 100% in different regions.”

Boeing’s sales and deliveries of new planes surged last year as customers looked beyond the Covid pandemic’s toll on travel demand, but the manufacturer still ended 2021 behind chief rival Airbus. Boeing handed over 340 jetliners to airlines and other buyers, up from 157 in 2020, it said Tuesday. The company’s shares added to earlier gains after the numbers were released and ended the day up 3.2% at $216.02. The deliveries were led largely by the 737 Max, which regulators worldwide had grounded for nearly two years after a fatal crash in 2018 and another in 2019. Airbus said Monday that it delivered 611 planes last year, up 8% from 2020.

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

Technical Pulse: BYD Co Ltd.

Recommended: Technical BUY; Analyst: Chua Wei Ren

BYD Co Ltd (HKEX: 1211) The upside is set to make a comeback after recent technicals indicated positive signals

Buy spot: 259.60 Stop loss: 235.60 Take profit 1: 290.00 Take profit: 330.50

Technical Pulse: Yankuang Energy Group Co Ltd.
Recommended: Technical BUY; Analyst: Chua Wei Ren

Yankuang Energy Group (HKEX: 1171) The upside is set to continue after recent technicals indicated positive signalsM.

Buy spot: 16.42 Stop loss: 14.00 Take profit 1: 19.50 Take profit: 21.50

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