Daily Morning Note – 13 May 2022
The Straits Times Index (STI) fell 1.9 per cent or 60.89 points to close at 3,165.18 on Thursday (May 12), as Asian markets tumbled on inflation fears following the release of US consumer price index (CPI) data. In the wider Singapore market, losers outnumbered gainers 418 to 149, after 2.09 billion securities worth S$1.99 billion changed hands. The sole gainer on the blue-chip index on Thursday was SGX, which rose 1.2 per cent or S$0.11 to S$9.50. At the bottom of the table was Yangzijiang Shipbuilding, which plunged 11 per cent or S$0.10 to end at S$0.81. The counter was also among the most actively traded counters, with 55.9 million shares traded.
Wall Street’s main indexes opened lower on Thursday (May 12), led by growth stocks, as investors worried that aggressive interest rate increases to curb decades-high inflation could tip the economy into recession. The Dow Jones Industrial Average fell 135.07 points, or 0.42 per cent, at the open to 31,699.04. The S&P 500 opened lower by 31.23 points, or 0.79 per cent, at 3,903.95, while the Nasdaq Composite dropped 164.98 points, or 1.45 per cent, to 11,199.25 at the opening bell.
SG
Sasseur Real Estate Investment Trust (Sasseur Reit), which owns outlet malls in China, is finding itself caught in a rising interest rate environment as it carries out a refinancing exercise for its quickly maturing loans. But its manager’s chief executive officer (CEO) Cecilia Tan believes that the Reit will be able to mitigate the situation and go away with “some level of savings” to secure higher distributions per unit (DPU), because the exercise entails increasing the proportion of its offshore debt. The refinancing exercise, expected to complete by the end of this year, is aimed at de-risking its current debt profile by staggering its debt maturity and amount. Currently, 53 per cent of Sasseur Reit’s loans are onshore loans with an outstanding quantum of 1.3 billion yuan (S$276 million), maturing in March 2023. Its offshore debts – S$214 million and US$20 million – have the same maturity date. The weighted average cost of debt as of Mar 31, 2022 was 4.4 per cent.
Drinks manufacturer Fraser and Neave (F&N) will be switching the packaging of its in-house brands and products to sustainable alternatives produced by its indirect subsidiary, Print Lab, F&N chief executive officer Hui Choon Kit has said. “We see that as an advantage. Consumers who care see it as an advantage,” he added. Some of these alternatives include a plastic bag substitute made entirely out of the roots of the cassava plant, paper bags that are recyclable or sustainably sourced, as well as compostable food packaging, all of which are produced in a new eco-friendly manufacturing plant called the Green Lab.
Moody’s Investors Service has changed its outlook on Ascott Residence Trust (ART) and Frasers Hospitality Trust (FHT) to “stable” from “negative” while affirming its Baa3 rating for both trusts. The credit rating agency expects both ART and FHT to benefit from the resumption of leisure and business travel, as movement restrictions ease and borders open across most countries. In a report released on Thursday (May 12), Moody’s analyst Tay Yu Sheng said its change in outlook for FHT to “stable” reflects an improvement in the hospitality trust’s liquidity, Tay also expects FHT’s credit metrics to improve in the next 18 months, supported by a recovery in operating performance and recent asset divestment. The outlook change for ART meanwhile, incorporates Moody’s expectation that the real estate investment trust (Reit) will remain financially prudent when executing its planned investments in longer-stay accommodation. Doing so will allow it to improve earnings diversification and buffer against the volatile hospitality sector, Tay added.
US
The pandemic stock-market and cryptocurrency bubble has officially burst, and now the question is whether the speculative unwind will trigger a global financial crisis. The broad Standard & Poor’s 500 has fallen 18 per cent from its 2020 highs, the closest that the traditional US stock-market gauge has come to a bear market since the crash at the start of the pandemic in early 2020. For the more speculative Nasdaq Composite, the damage is much worse, with a loss of 29 per cent. Bull-market leaders like electric-vehicle makers are short-circuiting. Even the mega-cap tech stocks such as Apple, Amazon and Facebook parent Meta Platforms, which seemed to be invulnerable to economic and market cycles, are now deep in bear-market territory.
US Mortgage rates jumped again this week, extending a steep climb that is shutting some would-be homebuyers out of the market. The average for a 30-year loan was 5.3 per cent, up from 5.27 per cent last week and the highest since July 2009, Freddie Mac said in a statement on Thursday (May 12). Rates tracked yields for 10-year Treasuries, which last week reached 3 per cent for the first time since 2018. US consumer prices rose more than forecast in April, signalling the Federal Reserve will need to be aggressive in its efforts to contain inflation. As the Fed raises benchmark interest rates, mortgage costs are expected to follow.
Facebook owner Meta Platforms Inc is preparing cutbacks in its Reality Labs division, a unit at the centre of the company’s strategy to refocus on hardware products and the “metaverse,” a spokesperson confirmed to Reuters on Wednesday. Chief technology officer Andrew Bosworth told Reality Labs staffers during a weekly Q&A session on Tuesday to expect the changes to be announced within a week, according to a summary of his comments viewed by Reuters. The Meta spokesperson confirmed that Bosworth told staffers the division could not afford to do some projects anymore and would have to postpone others, without specifying which projects would be affected.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Click the link to join: https://t.me/stocksbnb
Date: 9 May 2022
For any research-related matters, email: research@phillip.com.sg
For general enquiries, email: talktophillip@phillip.com.sg
or call 6531 1555.
Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information
Disclaimer
The information contained in this email is provided to you for general information only and is not intended to create any binding legal relation. The information or opinions provided in this email do not constitute investment advice, a recommendation, an offer or solicitation to subscribe for, purchase or sell any investment product. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise.
You should obtain advice from a financial adviser before making a commitment to invest in any investment product or service. In the event that you choose not to obtain advice from a financial adviser, you should assess and consider whether the investment product or service is suitable for you before proceeding to invest.
Confidentiality Note
This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.
-
Download
POEMS 3 App -
Call Back
-
Chat with us
Useful Links
About Us
This advertisement has not been reviewed by the Monetary Authority of Singapore.
IMPORTANT INFORMATION
This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.
An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.
Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.
Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.
The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.
The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.
The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com