Daily Morning Note – 15 January 2019

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YOUR PHILLIP SUMMARY

U.S. stocks closed lower Monday as weaker-than-expected China trade data sparked fresh fears of a global economic slowdown. The Dow Jones Industrial Average slid 86.11 points, or 0.4%, to end at 23,909.84, while the S&P 500 index shed 13.65 points, or 0.5%, to 2,582.61. The Nasdaq Composite Index dropped 65.56 points, or 0.9%, to close at 6,905.92.

Trump commented that China is “having a hard time with their economy because of the tariffs” and was confident that he should be able to “do a deal with China.” Treasury yields fell after reports showed Chinese exports falling 4.4% in December year-over-year, their worst decline in two years, thanks to trade tensions between U.S. and China and cooling global growth.

The partial government shutdown became the longest on record on Saturday as President Donald Trump and Congress showed few signs of ending the impasse.

Corporate results were also in the spotlight as fourth-quarter earnings season got under way. Bank earnings are in full swing with Citigroup kicking off its first big week of earnings report on a high note on Monday. Goldman Sachs, J.P. Morgan, Wells Fargo and Bank of America will be reporting their earnings later this week.

Source: CNBC, MarketWatch

RESEARCH REPORT

CapitaLand Limited – Another behemoth step

Recommendation: Accumulate(Maintained), Last Close Price: S$3.27

Target Price: S$4.00 , Analyst: Tara Wong

– CapitaLand announced the proposed S$11bn acquisition of Ascendas-
Singbridge (ASB).

– The transaction will increase CapitaLand exposure to Industrial and Logistics
assets and emerging markets such as India. It will also further boost CapitaLand
recurring income.

– Immediately accretive to EPS (+4%) and ROE (+9%), but slightly dilutive to NAV
(-4%).

– Maintain ACCUMULATE with TP of S$4.00.



BREAKING NEWS

President Donald Trump predicted the United States would reach a deal with China to end a tit-for-tat trade war, saying Beijing wants to negotiate and that talks are going well.”We’re doing very well with China,” Trump told reporters at the White House. “I think that we are going to be able to do a deal with China.” “China wants to negotiate,” he said.

India‘s annual retail inflation rate dropped to an 18-month low of 2.19 per cent in December, strengthening views of some economists that the central bank could ease monetary policy next month as prices for many food items fell and the nation faces a manufacturing slowdown.

Sri Lanka will repay a US$1 billion five-year sovereign bond due on Monday entirely from its reserves, central bank governor Indrajit Coomaraswamy said, after three of its state-run banks failed to raise funds from foreign sources.The government is struggling to repay its foreign loans, with a record US$5.9 billion due this year including US$2.6 billion in the first three months alone.

MAS is launching a S$75 million grant for equity market Singapore in February to help enterprises seeking to raise capital through Singapore’s equity market.

Technology group CSE Global on Monday said that it has secured infrastructure project contracts worth a combined S$84.8 million in the fourth quarter of 2018. This brings its full-year 2018 orders to S$150.5 million, a 43.6 per cent increase over S$104.9 million in 2017.

ST Engineering’s marine arm has won S$560 million of new contracts in the last quarter of 2018. The Ministry of Home Affairs has awarded it a contract for the design, construction and maintenance of Fast Patrol Boats for the Singapore Police Coast Guard.

Source: SGX Masnet, The Business Times

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

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

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