Daily Morning Note – 16 July 2018
WEEKLY MARKET OUTLOOK WEBINAR
Register HERE for MONDAY’s 11.15am webinar.
Archived webinars available.
RESEARCH REPORTS
Phillip Singapore Monthly – July 2018: Tail Risk to Base Case
Analyst: Paul Chew
– STI was down 4.65% in June. It has shed almost 10% over two months.
– We are lowering our STI target to 3700. While our bottom-up computation is
still at 3900, we are now benchmarking against the lower end of the
respective STI stock target prices.
– President Trump has taken the trade-war tail risk a notch closer to the base
case. He will likely be emboldened by a strong US job market, fiscal stimulus
support and firm approval ratings.
– In Singapore, the authorities have slapped additional stamp duties on
property transactions and demanded higher LTV for mortgages.
SREITs Monthly – Monthly Tracker: July 2018
Recommendation: NEUTRAL, Analyst: Tara Wong
– FTSE S-REIT Index declined 3.3% YTD. Sector yield spread over the benchmark
10-year SGS (10YSGS) yield remains below the -1SD level at 294bps.
– 3m SOR crept up to 1.59% as at end June 2018, close to 10-year highs.
– Remain NEUTRAL on S-REITs sector.
Banyan Tree Holdings Ltd – Takeaways from our recent marketing event
Recommendation: Accumulate (Maintained), Last Close Price: $0.53
Target Price: $0.73, Analyst: Tan Dehong
– Lapse of options granted to Accor and Vanke for the subscription of an
additional 5% stake in BTH each.
– Management contracts remain key growth catalysts from the partnerships.
– Other benefits from the partnerships with Accor/Vanke.
– Strong growth in tourism still expected in Thailand, the largest contributor to
Group revenue by geography.
– China remains the most important target group of tourists for Group.
Technical Analysis: Technical Pulse – The Phillip 20 Portfolio – June Monthly Review
Analyst: Jeremy Ng
– New Entries: China Sunsine, Japfa, DBS, Haw Par, Singtel, CityDev and Wing
Tai
– Stop Loss: Memtech Intl, DBS, Wing Tai, Chip Eng Seng, Singtel, Frencken and
Jardine C&C
– Take Profit: Japfa
– Total return since May 17 to June 18 is +2.28%
– Bullish rejection off the 3200 psychological support with oversold RSI mean
reversion suggests a rebound next for the STI
TECHNICAL PULSE
UMS Ltd – Weekly timeframe – Bullish
– The Bullish Engulfing Bar rejection on the week ended 13/07/18 has broken
price above the downtrend line with increasing volume further validates the
bulls are getting back control.
– For this rebound, price should be targeting the 0.945 resistance area followed
by 0.985.
For more information and additional disclosures, refer to the link here.
BREAKING NEWS
The US intelligence chief warned on Friday that the threat was growing for a devastating cyber assault on critical US infrastructure, saying the “warning lights are blinking red again” nearly two decades after the Sept 11, 2001, attacks.
China’s exports unexpectedly accelerated in June and its trade surplus with the United States hit a record high in a positive sign for the economy, though the overall result looks set to keep a bitter trade dispute with Washington on the boil for a while longer.
China‘s new medical insurance regulator will begin negotiations with domestic and overseas pharmaceutical companies to lower prices of cancer drugs in a bid to cut the financial burden on patients, state news agency Xinhua said on Saturday.
Singapore’s economy expanded 3.8 per cent year-on-year in the second quarter of 2018, lower than economist expectations of 4.1 per cent and down from the first quarter’s 4.3 per cent growth, according to Ministry of Trade and Industry (MTI) advance estimates on Friday.
A Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike on Monday that has slightly hit oil output after employers did not respond to demands for higher wages and pension benefits.
GOGOVAN – an on-demand delivery van service backed by Singapore’s Centurion Private Equity and Singapore Press Holdings – has raised US$250 million in new funding.
Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research
Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research
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