Daily Morning Note – 16 Febraury 2021

PHILLIP SUMMARY

Stocks looked set to advance in Asia Tuesday as investors took comfort from progress on the Covid-19 vaccine rollout. Oil held an overnight gain as freezing temperatures in Texas roiled energy markets.

Futures rose in Tokyo and Australian shares saw modest gains. S&P 500 contracts pointed higher. Earlier, European stocks climbed led by a surge in the FTSE 100 Index after the U.K. hit a vaccination milestone. U.S. markets were closed for Presidents’ Day on Monday and Chinese markets remain shut for the Lunar New Year holiday. The dollar was little changed and Treasury futures retreated.

An Arctic blast in the U.S. threatened to disrupt energy supplies, sending crude oil to a 13-month high. Texas began rolling power blackouts for millions of households for the first time in a decade and traders estimate a few hundred thousand barrels a day of output in the state may be impacted by well shutdowns, traffic jams and power outages.

BREAKING NEWS

SG

High-speed craft builder Penguin International’s net profit for the six months ended Dec 31, 2020 fell 16 per cent year-on-year to S$9.3 million. Revenue edged up 1.3 per cent to S$69.28 million due to an increase in the number of stock vessels sold, while earnings per share fell to 4.22 Singapore cents from 5.02 Singapore cents. Penguin said that its core shipbuilding and crewboat chartering businesses have been hit by the pandemic and depressed oil prices. “Demand for new vessels has weakened, and crewboat charter rates and utilisation rates have fallen year-on-year,” it added.

Shares of Oxley Holdings rallied at the start of the week, a day after the property developer announced that its half-year net profit more than doubled to S$34.1 million, from S$15.7 million a year ago. This came on the back of higher revenue and lower finance costs, the mainboard-listed company said.

Shareholders of Challenger Technologies are likely to have been pleasantly surprised by the consumer electronics retailer’s earnings report for FY2020, which was unveiled this past week. Revenue declined nearly 18 per cent to S$270.8 million, because of the absence of a trade show and lower sales as a result of the restrictions on movement imposed by the government during the year to counter the Covid-19 pandemic. Yet, Challenger reported blowout earnings of 6.73 cents per share – up 32 per cent versus the 5.11 cents per share it reported for FY2019. Profit before tax from continuing operations increased by almost S$5.6 million to more than S$26.8 million.

Transport operator ComfortDelGro’s net profit for the year ended Dec 31, 2020 plunged nearly 77 per cent year-on-year to S$61.8 million as the pandemic brought activity to a halt. Revenue slumped around 17 per cent to S$3.22 billion as its operations across seven countries were hampered by lockdowns. Group operating costs eased 10.9 per cent to about S$3.1 billion in line with slower business, cost saving measures and government relief. Its operating performance was boosted by government relief packages, without which Comfort would have chalked up an operating loss of S$46.2 million instead of an operating profit of S$123.1 million. In comparison, its operating profit a year ago was S$415.8 million.

US

Billionaire Elon Musk’s Tesla Inc will set up an electric-car manufacturing unit in the southern Indian state of Karnataka, according to a government document seen by Reuters on Saturday. “The U.S. firm Tesla will be opening an electric car manufacturing unit in Karnataka,” the state government said in a brief statement. The statement was part of a broader document outlining the highlights of India’s budget to its people in the local language of Kannada.

Apple approached Japan’s Nissan Motor in recent months about a tie-up for its autonomous car project, but the talks ended after disagreement over branding, the Financial Times reported. The contact was brief and the discussions did not advance to senior management level, the report added, citing people briefed on the matter. The talks faltered after the iPhone maker asked that Nissan make Apple-branded cars, a demand seen as effectively making the automaker just a hardware supplier, the newspaper reported..

Summary

Stocks looked set to advance in Asia Tuesday as investors took comfort from progress on the Covid-19 vaccine rollout. Oil held an overnight gain as freezing temperatures in Texas roiled energy markets.

Futures rose in Tokyo and Australian shares saw modest gains. S&P 500 contracts pointed higher. Earlier, European stocks climbed led by a surge in the FTSE 100 Index after the U.K. hit a vaccination milestone. U.S. markets were closed for Presidents’ Day on Monday and Chinese markets remain shut for the Lunar New Year holiday. The dollar was little changed and Treasury futures retreated.

An Arctic blast in the U.S. threatened to disrupt energy supplies, sending crude oil to a 13-month high. Texas began rolling power blackouts for millions of households for the first time in a decade and traders estimate a few hundred thousand barrels a day of output in the state may be impacted by well shutdowns, traffic jams and power outages.

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

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