Daily Morning Note – 16 April 2020


Asian stocks looked primed for losses after a weak session on Wall Street, as bleak retail, manufacturing and homebuilding data added to concerns about a severe U.S. recession. Treasuries surged.


Mapletree Industrial Trust will set aside up to S$13.7 million to cushion the impact of Covid-19 on its tenants in Singapore, over and above the property tax rebates announced by the government, which will be fully passed on to them. The additional programme is aimed at easing the pressure on tenants from “supply-chain disruptions and falls in business volume as a result of the pandemic”.

City Developments Limited (CDL) is acquiring a 51.01 per cent stake in Chinese real estate developer Sincere Property Group for RMB4.39 billion (about S$0.88 billion), which will enable it to expand its footprint in China. As part of the transaction, a call option will also be granted to CDL, which it can exercise to purchase an additional 9 per cent interest in Sincere Property for RMB0.77 billion at the same entry valuation. If exercised, it will allow CDL to acquire a 60.01 per cent stake in Sincere for a total of RMB5.16 billion.

The overall passenger numbers of SIA Group’s airlines fell 65 per cent year on year to 1.1 million in March, against the backdrop of muted travel demand and travel restrictions amid the Covid-19 outbreak. The group’s airlines also recorded a a 60.4 per cent year-on-year decline in passenger carriage, measured in revenue passenger-kilometers. Capacity cuts in March resulted in an overall reduction of 43.8 per cent, measured in available seat kilometres, during the month.

Japfa said it will sell a 25-per-cent stake in its subsidiary to Japanese conglomerate Meiji for US$254.4 million in cash. In addition, the subsidiary will get to supply raw milk to Meiji on a five-year rolling basis, renewable annually. The subsidiary, AustAsia Investment Holdings, operates Japfa’s dairy-farming business in China. Japfa said the move is in line with its plans to grow AustAsia into the largest independent raw milk producer in China.

Chinese property developer Yanlord Land Group recorded 6.77 billion yuan (S$1.36 billion) in total contracted pre-sales from residential units and car parks for its latest quarter, 18.4 per cent higher than a year ago, even as the Covid-19 pandemic has weighed on property-buying sentiment in China. The pre-sales were for contracted gross floor area of 192,696 sq m, 7.1 per cent more than a year ago.

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


City Development Ltd

Recommended Action: Technical SELL

Citydev (SGX: C09) strong sell-off from 11.39-6.10 shows a clear bearish impulse and as such, the likelihood of a continued downfall is confirmed by today’s technical.

Read more technical reports


Singapore Press Holdings (Credit View) – Bracing for the long run

Credit Commentary, Credit Analyst – Timothy Ang

– We are Neutral on SPH’s credit profile given its large cash pile, low levels of short term debt and manageable gearing levels

– Although 2Q20 earnings were flat, expect a weaker 2H20

– Interim dividend was cut by c.73%yoy to 1.5 cents to conserve cash

– We see value in SPHSP 4.5% PERP, offering a substantial spread increment of 68bps over the SPHSP 4% PERP

Read more research reports

HK Reports – Read up on our Hong Kong reports here


Webinar Of The Week

Market Outlook: (PSR) SIA Capital Raising Exercise (Bonds), Banking Monthly, REITS Monthly, China Monthly, Technicals & Singapore 2Q20 Equity Strategy

Date: 13 April 2020

For more on Market Outlook

Phillip Research in 3 minutes: #19 – Singapore Banking Sector Update

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