Daily Morning Note – 16 Sep 2020

PHILLIP SUMMARY

Asian stocks look set for a muted start to trading Wednesday as investors await a Federal Reserve meeting to gauge the extent of central bank support for the economic recovery. Futures pointed to modest gains in Australia and Hong Kong, and were little changed in Japan. S&P 500 futures opened relatively flat after the benchmark rose for a third consecutive session, as gains in technology shares helped offset a late slide in financials.

Treasuries and the dollar were little changed. Oil rose to its highest in more than a week after economic data from China to the U.S. fueled optimism that factories are getting back to work. The Federal Reserve is expected to maintain its dovish stance at its policy meeting Wednesday.

BREAKING NEWS

Mainboard-listed Hiap Seng Engineering and its subsidiary, HS Compression & Process (HSCP), will be placed under judicial management.Both of their applications, filed in July, were granted by the High Court on Tuesday. For its full year ended March 31, Hiap Seng also narrowed losses to S$19.92 million, from S$39.49 million previously. Trading in Hiap Seng’s shares has been suspended since last November.

Keppel associate Floatel’s creditors extend forbearance to end-September. The forbearance agreement between Floatel International and an ad-hoc committee (AHC) of holders of its US$400 million senior secured, first-lien 9 per cent bonds has again been extended, this time to Sept 30, from Sept 15. The AHC holds more than 56 per cent of the Oslo-listed bonds’ outstanding amount.

Thailand-based oil service specialist Mermaid Maritime Public Co will sell its 33.76 per cent stake in Asia Offshore Drilling (AOD) for US$31 million in cash. Mermaid Maritime’s wholly-owned subsidiary, Mermaid International Ventures (MIV), last Friday exercised a put option – about three weeks before it expires – to sell all its shares in AOD to Oslo-listed deepwater drilling contractor Seadrill. An affiliate of Seadrill holds the remaining 66.24 per cent interest in AOD.

Quarz Capital ups stake slightly in Sabana Reit from 5 per cent as it stood in late July to 6 per cent on Monday., restates plan to vote down ESR-Reit merger. A disclosure filed to the Singapore Exchange showed that the latest transaction by the investment management firm was a purchase of 15,000 shares in the Reit for S$5,625.

Sembcorp Industries has signed a multi-year renewable energy deal to provide a total energy solution to tech giant Google, with a focus on locally-sourced renewable power to support Google Singapore’s operations. The deal is part of Google’s goal for its data centres to run entirely on carbon-free electricity by 2030, which includes energy generated from rooftop solar installations of close to 500 public housing flats.

Potential Hyflux investor Pison Investments on Tuesday said it has received 158 tender application forms from noteholders and other eligible creditors, but that efforts to engage with the unsecured working group (UWG) of seven banks have failed. The UWG – comprising Mizuho, KfW, Bangkok Bank, BNP Paribas, Standard Chartered Bank, CTBC Bank and the Korea Development Bank – in August filed to place Hyflux under judicial management because it no longer wanted Hyflux’s management to lead any restructuring effort.

As Jakarta enters a partial lockdown for the second time, Lippo Malls Indonesia Retail Trust’s (LMIRT) seven malls in the city will remain operational with an unchanged visitor capacity limit of 50 per cent.On Monday, Jakarta reimposed social restrictions for an initial two-week period till Sept 27, which may be extended, in view of the rising number of Covid-19 cases. The tightened restrictions mean that businesses, malls and houses of worship can only operate at limited capacity, while dining in at restaurants and cafes is not allowed.

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

TECHNICAL PULSE

Singapore Exchange Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Singapore Exchange Ltd (SGX: S68) since SGX broke out of the inverted head and shoulder formation as reported back in 24th July and this has confirmed SGX upside despite making a minor corrective pullback. The technical has indicate that the stock has completed its correction and is heading to the upside.

>> Read more technical reports

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