Daily Morning Note – 16 January 2019

WEEKLY MARKET OUTLOOK WEBINAR

Register HERE for MONDAY’s 11.15am webinar.

Archived webinars available.

YOUR PHILLIP SUMMARY

Stocks ended higher on Tuesday thanks to a rally in tech equities and reports of further stimulus measures from China. Stocks received a boost after China’s Ministry of Finance said it would cut taxes and increase infrastructure spending, following lackluster trade data earlier this week. Tech equities were buoyed by climbing shares for Netflix Inc. after the video-streaming firm said it would raise prices for U.S. subscribers.

The S&P 500 rose 1.1% to end around 2,610, based on preliminary numbers. The Dow Jones Industrial Average advanced 155 points, or 0.6%, to 24,065. The Nasdaq Composite climbed 1.7% to finish near 7,024. U.S. equity benchmarks rose to key levels, with the Nasdaq ending above its 50-day moving average for the first time since early October.

Kansas City Fed President Esther George said the central bank likely should “pause” from rate hikes until it assesses conditions. She mentioned that a pause in the normalisation process would give the Fed time to assess if the economy “is responding as expected with a slowing of growth to a pace that is sustainable over the longer run.”

Source: CNBC, MarketWatch

RESEARCH REPORT

First Reit – Challenging Times

Recommendation: Neutral (Maintained)

Target Price: S$0.88, Analyst: Tara Wong

– FIRT will be re-positioned to identify more strongly with the new co-Sponsor, OUELH.

– No compromise on paying distributions to unitholders, against the backdrop of extended receivables days.

– Price overhang as fund-raising is likely in the near-horizon in order to execute portfolio diversification strategy of acquiring from new co-Sponsor, OUELH.

– De-rating catalyst: expiring leases likely to be re-negotiated with a lower quantum and/or on IDR-denominated terms (currently on SGD-denominated terms).

– Maintain Neutral; new target price of $0.88 (previously $1.30).



BREAKING NEWS

ST Engineering announced after trading hours on Tuesday that its aerospace arm secured new contracts worth S$450 million in the fourth quarter of 2018 for services including maintenance and modification for wide-ranging aircraft parts from the airframe to components.This brings the total value of the contracts to S$2.06 billion for 2018.

Sembcorp Marine’s subsidiaries Sembcorp Marine Repairs and Upgrades, and Semb-Eco on Tuesday entered into a share swap agreement with Ecospec Global Technology and their shareholders Chee Hwee Hong and Neonlite Investments. Some 10 million shares representing 20 per cent of the issued share capital of Ecospec Global Technology will be exchanged for 23.8 million shares representing 45 per cent of the issued share capital of Semb-Eco.

JP Morgan Chase posted quarterly profit below analysts’ expectations for the first time in 15 quarters as whipsawing markets late last year impacted bond trading desks. The bank generated $1.98 per share in profit for the fourth quarter of 2018, below the $2.20 per share average estimate of analysts surveyed by Refinitiv.

IPS Securex Holdings announced that it has received a letter of acceptance from an undisclosed government agency in South-east Asia for a contract worth S$19.1 million.Out of the S$19.1 million, up to S$10.1 million is for IPS to supply, deliver, install, commission and test an integrated security solution (System A) and provide maintenance support services for seven years for System A following its complete implementation, as well as other System A support and professional services.

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

Important Information

Disclaimer
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 “as 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.