Daily Morning Note – 14 December 2020

Please take note that our last morning note for the year will be on the 14th of December before resumption in Jan 2021. Thank you and have a great rest of the year.


Brent crude topped US$50 a barrel last week for the first time since March, a milestone for an oil market that’s been grinding its way back out of a deep slump for months.

Things aren’t back to normal yet, but the positive signals are proliferating. The enormous glut of fuel that accumulated this year on everything from tiny barges to giant supertankers is being steadily depleted.

While the coronavirus pandemic is worse than ever in the US, demand in Europe is bouncing back as a second wave of lockdowns eases and Asia continues to pull in huge volumes of crude.

But there’s more to this than a realignment of supply and demand – huge financial flows are also driving the price rally. In a world that’s expecting to see travel recover sharply next year, crude has become a hot Covid-vaccine trade.


We are dropping coverage of EC World REIT and Penguin International with immediate effect due to reallocation of resources. The previous recommendation can no longer be relied upon.

Law firm Maurice Blackburn has launched a second-class action lawsuit against Crown Resorts, it said on Monday, alleging that the Australian casino giant’s corporate failings caused a massive share price plunge in October.

AstraZeneca, one of the drugmakers leading the fight against Covid-19, highlighted where its growth will come from after the pandemic with a US$39 billion deal for rare-disease specialist Alexion Pharmaceuticals.

Britain’s trade talks with Australia are advancing well, Trade Minister Liz Truss said on Sunday, speaking after the latest round of negotiations and with both sides having made initial offers on goods market access. Britain stands on the brink of a disruptive break with the European Union, its largest trading partner, as talks to secure a long-term trade deal grind into their final days ahead of Jan 1, when transition arrangements that have kept it in the EU single market and customs union since formally leaving the bloc in January run out.

United States began shipping vaccine nationwide on Sunday as it launched a massive immunisation effort, while in Germany an explosion of cases forced a return to partial lockdown. Delivery trucks with special refrigeration equipment rolled out of a facility in Kalamazoo, Michigan, as part of an ambitious public-private plan to ship millions of doses of the newly approved Pfizer-BioNtech vaccine to vulnerable Americans.

Iran on Sunday said a fire caused by the spillage from a ruptured oil pipeline in the southwest of the country has been brought under control, state news agency Irna reported.

Lippo Malls Indonesia Retail Trust (LMIRT) on Sunday night acknowledged that on Dec 11, it received another letter purporting to be issued by 50 unitholders on the extraordinary general meeting (EGM) to vote on the proposed acquisition of Lippo Mall Puri. It said that the contents of the the latest letter are substantially similar to the Dec 3 letter, containing a request for the postponement of the EGM which is scheduled to take place on Monday, Dec 14 or convening another EGM not earlier than three months from the scheduled date.

Keppel Corporation launched a new two-year programme under its partnership with the China Foundation for Poverty Alleviation (CFPA) at a signing ceremony held on Saturday in Kunming City, Yunnan Province. This is to further support the Chinese government’s plans to uplift rural communities and stimulate the development of remote regions. It is also part of the five million yuan (S$1 million) collaboration between Keppel Corporation and the CFPA launched in 2018.

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


Paypal Holdings Inc

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Paypal Holdings Inc (US: PYPL) has completed its full set of intermediate phase of the Elliott wave, including the larger regular flat corrective pattern and based on the technical, there is a possibility that Paypal is heading for another upside.

>> Read more Technical reports


Lendlease Global Commercial REIT – A cut above the rest

Recommendation: ACCUMULATE (Initiation), Last Done: S$0.73

Target Price: S$0.78, Analyst: Tan Jie Hui

– Stable income from Milan commercial property for next 12 years (FY20 GRI: 34%). Retail foothold in the heart of Singapore poised to benefit from Phase 3 (GRI: 66%) reopening.

– We see organic growth of c.2% from annual rental escalations and upcoming developments in Orchard/313. Coupled with inorganic growth opportunities from the sponsor’s stabilized pipeline of assets, of up to c.A$32.4bn.

– Initiate coverage with ACCUMULATE and DDM TP (cost of equity 8%) of S$0.78. Valuations attractive at FY21 yields of 6.1% vs. diversified retail peers of 5.2%.

Fortress Minerals Ltd – Rise of iron ore producer

Recommendation: BUY (Initiation), Last Done: S$0.205

Target Price: S$0.275, Analyst: Vivian Ye

– Growing demand from steel mills in Malaysia to spur higher sales volumes. We project 54% volume growth from FY20 to FY22e.

– Low production cost of US$28.81/WMT. Reserves to expand with only 5% of its mining concession area explored so far.

– Initiate coverage with BUY and TP of S$0.28. Valued at 11x FY21e PE, in-line with industry average. Fortress is smaller in size but is growing faster and enjoy higher returns than industry.

Biolidics Ltd – Q&A on their antigen rapid test kit

Recommendation: NON-RATED, Last close: S$¬¬0.31; Analyst: Phillip Research Team

– On 26 November, Biolidics announced it entered into a distribution agreement with JOYSBIO for their SARS-CoV-2 Antigen Rapid Test Kit.

– The Antigen Rapid Test Kit has received Provisional Authorisation by the Health Sciences Authority in Singapore.

– We arranged for a Q & A with Biolidics on their recent development with this and any other COVID-19 test kit.

SG Bonds Weekly – Week 51

Credit Analyst: Timothy Ang

– Primary issuance in Asia G3 markets slows down into the second week of December but with a more diverse group of issuers. Investor demand is however still strong – Bonds priced with negative New Issue Premiums this week continues trade strongly in the secondary market.

– Starhill Global Real Estate Investment Trust’s trustee issued S$100mn of 3.85 per cent perpetual securities.

– The Singapore Exchange has inked an agreement with the China Central Depository & Clearing Co (CCDC) to strengthen and promote the bond markets of both countries.

Eagle Hospitality Trust – Phillip on the Ground

Credit Analyst: Timothy Ang

– A new REIT manager has been proposed, subject to Stapled Securityholders’ agreement in an upcoming EGM vote.

– 3 possible outcomes from the EGM: 1) The new REIT manager is appointed and restructuring commences, 2) the new REIT manager is not appointed and winding-up of EHT commences, or 3) no resolutions are approved and EH-REIT is wound down.

– Accept the new managers or undergo a winding-down or sale of existing assets. With the approval, additional funding of US$125mn will be provided to allow the assets to re-open and maybe revalued upwards.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here


Webinar Of The Week

Market Outlook: (PSR) Keppel (Int.), Dasin, Yoma, SG Banking Monthly, Airbnb IPO & SG Weekly

Date: 07 December 2020

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #26 – iX Biopharma Ltd; Initiation

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