DAILY MORNING NOTE | 15 January 2024

Trades Initiated in the past week


Week 3 equity strategy: There were significant shifts in market expectations of inflation this week. The initial narrative was inflation is stuck at current levels and equity markets wobbled. This was after December CPI in the US nudged back up to 3.4% YoY (previously 3.1%), surpassing expectations. The stubborn parts of inflation remain shelter, expanding 6.2% YoY.

Optimism over lower inflation came back on Friday when PPI was better than expected. The direction of lower expected rates was evident in the bond markets. The 2-year government bond yield fell to 4.14%, the lowest since May23. And futures market is now signalling an 80% probability of a rate cut this March.

Our expectations are two rate cuts in 2024. Directionally core inflation is trending down. The pace is slower as goods inflation is heading sideways after the huge decline over the past 12 months. We remain positive on REITs.

On the Taiwan Presidential elections, the reduced popularity vote of the ruling DPP party from 57% in 2020 to the current 40%, has lowered the likelihood of a tail-risk event (or conflict) with China. The weakened position extends to its loss of a majority in the legislature. It will hamper its ability to pass possible policies that may antagonize China. President Biden chimed in by stating the US does not support an independent Taiwan.

Paul Chew
Head Of Research

Singapore shares capped an unremarkable, albeit choppy week on a low note on Friday (Jan 12). Fresh tensions in the Middle East and latest data showing China’s full-year exports fell for the first time in seven years were enough to put traders off. It fell 9.69 points or 0.3 per cent to 3,191.72. Week on week, Singapore shares gained 7.4 points or 0.2 per cent. This followed Wall Street’s tepid overnight showing, which parsed slightly hotter-than-expected US inflation data with the key indices ending close to the flatline.

Wall Street stocks were mixed at the end of Friday’s (Jan 12) session following better inflation data and mixed corporate earnings. US wholesale prices edged down 0.1 per cent in December, defying expectations for higher prices and countering Thursday’s report that showed an uptick in consumer prices. Meanwhile, leading banks were mostly lower following a deluge of quarterly results, while airlines were hammered after Delta’s forecast disappointed investors. The Dow Jones Industrial Average dipped 0.3 per cent to 37,592.98. The broad-based S&P 500 added 0.1 per cent at 4,783.83, while the tech-rich Nasdaq Composite Index was unchanged at 14,972.76.

Top gainers & losers


Events Of The Week



Semiconductor equipment maker AEM Holdings said on Sunday (Jan 14) that it has found a shortfall in the group’s inventories following an internal stock-taking exercise, which it expects to negatively impact the group’s profitability for FY2023. As at end-September last year, the group’s inventories were stated to be worth S$358.6 million. This was shared in an investor update released on Nov 9, 2023. However, a preliminary estimate suggests that the group’s inventories are anticipated to be 5 to 7 per cent lower than this figure, said AEM. It noted that the internal stock-taking exercise is still ongoing, and that it had taken into account “the ordinary and usual course of inventory movement”. Based on an initial investigation into this issue, the group attributed the shortfall to “human error in transactions” with its enterprise resource planning system, which had occurred during the migration of production to the group’s Penang facility from Singapore.

The Singapore High Court has made a decision in favour of a facility manager of Keppel DC Reit, paving the way for a positive outcome for the litigation announced by the data-centre real estate investment trust (Reit) in March 2022. DXC Technology Services Singapore was ruled to be in breach of its Standard Services Agreement (SSA) with Keppel DC Singapore 1, the master lessee and appointed facility manager of a data centre in Serangoon North. DXC had tried to reduce the amount of floor space it leased, but Keppel DC Singapore argued that the SSA did not permit DXC to do so at the time. Keppel is claiming S$3 million from DXC as the sum outstanding from April 2021 to December 2021, as well as all losses it suffered as a result of DXC’s refusal to pay for the space it unilaterally gave up from Apr 1, 2021 to Mar 31, 2025.

Fish vendor Qian Hu has sunk into the red with a net loss of S$9.3 million for the second half of the financial year ended Dec 31, 2023. This is in contrast to a net profit of S$584,299 in the year-ago period, the company said in a bourse filing on Friday (Jan 12). This was largely attributed to a S$7.4 million loss on disposal of a substantial portion of its Asian arowana – also known as dragon fish – broodstock, said Qian Hu, explaining that the group had made a strategic decision to reduce breeding activities of the fish, due to “oversaturation and declining prices” faced by certain mass-market varieties.

Frasers Property issued a statement on Friday (Jan 12) refuting talk of a potential sale of the company or its assets. It was responding to recent news reports speculating that the company’s majority owners could sell the company or some of its assets, as part of a strategic review. “The company has not been informed, and is not aware of, any discussions in relation to the proposed transactions,” said Frasers in its statement.


Cathay Pacific Airways slashed the number of flying hours needed to become a captain by 25 per cent, people familiar with the matter said, as a pilot shortage contributes to mass flight cancellations and threatens to undermine the airline’s Covid rebound. Pilots now must have a minimum of 3,000 hours of flying experience and 500 flights to be considered for promotion, according to an operational handbook that was updated on Jan 10. That’s down from 4,000 hours required previously. Candidates still need 1,500 hours on commercial jets, as well as training, and must meet other requirements as well. The move is intended to make the carrier more desirable to pilots and bolster its captains ranks, both gutted by Covid-related job losses. Subsequent pay cuts for the remaining pilots accelerated an exodus of cockpit crews. As a result, the airline has 48 per cent fewer captains and first officers than before the pandemic, according to data from Cathay’s pilots union – a shortage that has triggered the current crisis over flight cancellations.

Citigroup on Friday (Jan 12) reported a US$1.8 billion loss for the fourth quarter as it recorded charges to refill a government deposit insurance fund and carry out a sweeping internal reorganisation. The loss was also fuelled by the bank stockpiling money to cover currency risks in Argentina and Russia. The third-largest US lender by assets posted a loss of US$1.16 per share for the three months ended Dec 31. Revenue slid to US$17.4 billion in the quarter from a year earlier. It was the first time Citigroup broke out earnings for its five businesses – services, markets, banking, US personal banking and wealth, which were previously housed under broader divisions.

Wells Fargo’s fourth-quarter profit jumped as the lender benefited from cost cuts, but it warned that 2024 net interest income could be 7 per cent to 9 per cent lower than a year earlier, sending its shares down 1.8 per cent before the bell. As the Federal Reserve raised interest rates, banks benefited by charging borrowers more on interest. With market participants forecasting rate cuts this year, banks’ interest income could start to erode. Revenue in the fourth quarter rose 2 per cent to US$20.5 billion. Net income rose to US$3.45 billion, or 86 US cents per share, for the three months ended Dec 31, the lender said on Friday (Jan 12). That compares with US$3.16 billion, or 75 US cents per share, a year earlier.

Bank of America’s fourth-quarter profit shrank as the lender took US$3.7 billion in combined charges to refill a government deposit insurance fund and phase out a loan index. The second-largest US lender posted net income of US$3.1 billion, or 35 US cents a share, for the three months ended Dec 31. That compares with US$7.1 billion, or 85 US cents a share, a year earlier. Its net interest income (NII) – the difference between what banks earn from loans and pay to depositors – fell 5 per cent to US$13.9 billion as the company spent more to keep customer deposits while demand for loans stayed subdued amid high interest rates.

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


PSR Stocks Coverage



For more information, please visit:


Upcoming Webinars

Corporate Insights by LHN Limited [NEW]

Date & Time: 19 January 2024 | 12pm – 1pm

Register: http://tinyurl.com/4bu8mxsa

Corporate Insights by Sheffield Green Ltd [NEW]

Date & Time: 24 January 2024 | 12pm – 1pm

Register: http://tinyurl.com/b997c3jf

Corporate Insights by AIMS APAS REIT [NEW]

Date & Time: 1 February 2024 | 12pm – 1pm

Register: http://tinyurl.com/jbvphczb

Corporate Insights by Keppel DC REIT [NEW]

Date & Time: 1 February 2024 | 3pm – 4pm

Register: http://tinyurl.com/mr2ypw7n

Corporate Insights by MoneyHero Group [NEW]

Date & Time: 6 February 2024 | 12pm – 1pm

Register: http://tinyurl.com/32yjvzpf

POEMS Podcast:

Research Videos

Weekly Market Outlook: Elite Commercial REIT, FEHT, Tech Analysis, SG Banking, SG Weekly & More!
Date: 8 January 2024
Click here for more on Market Outlook.
Sign up for our webinars here, and be among the first to receive economy and market updates.


Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
Click here for more on Phillip in 3 mins.

Follow our Socials

Facebook Social Icon Instagram Icon Twitter Social Icon Youtube Social Icon Linkedin Social Icon TikTok Social Icon Spotify Social Icon

Join our Singapore Equity Research Community on POEMS Mobile 3 App for the latest research reports, market updates, insights and more

Click to join!


The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. 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 may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.

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.

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


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