DAILY MORNING NOTE | 17 April 2023

Week 16 equity strategy: Last week was volatile due to conflicting narratives surrounding inflation. The market gyrated from high core inflation to possible mild recession later this year as indicated in the Fed minutes, to a major drop in manufacturing prices or PPI. Despite this, we believe interest rates have peaked and recommend long duration assets like REITs. Taiwan and Korean exports contracted by 19% and 14% YoY respectively in March, further indicating a global slowdown. And US retail sales growth of 3.6%, is the slowest in three years.

This week, a slew of Chinese data is expected. We do not anticipate anything encouraging. 1Q23 was disrupted by a major infection wave and ongoing capacity rebuilding in the services industry. Fed speak from a few FOMC members will also be a prominent feature this week.

Singapore shares climbed 0.3 per cent or 8.12 points to close at 3,302.66 points on Friday (Apr 14), as sentiment was lifted by the Monetary Authority of Singapore’s decision to leave its monetary policy settings unchanged for the first time in 18 months. In the wider Singapore market, gainers outnumbered losers 330 to 236, with 1.3 billion securities worth S$839.8 million traded.

Wall Street stocks retreated Friday (Apr 14) following a positive session on European bourses, as disappointing US retail sales data offset a lift from better-than-expected bank earnings. Retail sales fell by a surprisingly big 1 per cent in March, extending a downward trend that signals cooling in the world’s biggest economy. But that downcast reading was countered by surprisingly good earnings from JPMorgan Chase and other large banks that cheered investors nervous about the sector. After opening modestly higher, major US indices spent the rest of the day in the red.

Top gainers & losers







Asset Co – the entity majority-owned by external investors after the legal completion of the proposed combination of Keppel Offshore and Marine (Keppel O&M) and Sembcorp Marine – is actively engaging clients on potential contracts for its legacy rigs, Keppel Corporation said in an exchange filing on Saturday (Apr 15). “Amid the improving offshore rig market, we are hopeful that the monetisation of the legacy rigs can take place sooner, leading to an earlier repayment of the vendor notes issued by Asset Co to Keppel,” Keppel said in its response to shareholder questions raised ahead of its annual general meeting scheduled for Apr 21.

Real estate group Far East Orchard is expecting its hospitality business to stabilise in the next two years following a gradual recovery from the Covid-19 pandemic last year, the company said on Saturday (Apr 15). Its operational priority is to grow its hospitality portfolio to 25,000 rooms by 2025 and to deepen its presence in Singapore, Australia and Japan, it said in response to questions from the Securities Investor Association Singapore (Sias) ahead of its annual general meeting on Apr 19. Since the start of its FEOR 25 five-year strategy, Far East Orchard has, together with its joint venture Toga Far East Hotels, added 15 hotels under management with about 3,300 rooms across Australia, New Zealand, Germany, Japan and Singapore.

Catalist-listed Zico Holdings has entered into a conditional placement agreement that will raise S$2.7 million and give placee and existing shareholder Nik Norzul Thani Hassan Thani a 10.57 per cent stake of its enlarged share capital, it announced on Friday (Apr 14). The placee will become a substantial shareholder. The agreement is for the subscription of an aggregate of 30 million ordinary shares in the professional service firm, at an issue price of S$0.09 per placement share – which represents a 34.2 per cent premium over its last traded price of S$0.067 at market close on Friday. Upon completion of the placement, the company will have an issued and paid-up capital of close to 379.9 million ordinary shares.

The Singapore Exchange Regulation (SGX RegCo) will look into potential listing-rule breaches by GS Holdings and refer the matter to relevant authorities, after an independent review of the company flagged lapses in its handling of its branding, operation and procurement (BOP) business. The review also noted potential breaches of directors’ fiduciary duties. GS Holdings’ audit and risk committee had appointed Deloitte to conduct the independent review, after its statutory auditors subjected the company’s FY2020 financial statements to a disclaimer-of-audit opinion over issues surrounding the BOP business.

Singapore-based fintech startup Volopay has received an in-principle approval for a major payment institution licence from the Monetary Authority of Singapore (MAS). This means that Volopay’s payment services – account issuance, e-money, domestic money transfer and cross-border money transfer – will be regulated under the Payment Services Act. The startup noted the approval is an “incredible business outcome” as that will enable it to strengthen its foothold and services in Singapore.


JPMorgan’s profit climbed in the first quarter as higher interest rates boosted its consumer business in a period that saw two of the biggest banking failures in US history. The bank’s profit increased 52 per cent to US$12.62 billion, or US$4.10 per share, in the three months ended Mar 31. JPMorgan set aside provisions of US$2.3 billion, up 56 per cent from last year. Revenue at the lender’s consumer and community banking unit rose 80 per cent to US$5.2 billion. Its Wall Street investment banking business was weighed down by tepid markets for mergers, acquisitions and stock sales.

Citigroup’s first-quarter profit beat Wall Street expectations on Friday (Apr 14) as it earned more from borrowers paying higher interest on loans, benefiting from a tighter monetary policy by the Federal Reserve. However, it set aside US$241 million in the quarter to cover potential loan losses against the backdrop of a slowing economy and compared to a reserve release of US$138 million a year ago. The lender’s deposit growth was flat at US$1.33 trillion from a quarter as well as a year ago as investors moved their cash into money market funds to chase greater yields. Its loans also fell marginally to US$652 billion, while its net interest income rose 23 per cent to US$13.3 billion.

Wells Fargo on Friday (Apr 14) beat profit expectations for the first quarter as the lender earned more from higher interest rates following the US Federal Reserve’s (Fed) tighter monetary policy. The bank, however, set aside US$1.21 billion in the quarter to cover for potential loan losses, compared to a release of US$787 million a year earlier. The provision included a US$643 million rise in the allowance for credit losses reflecting an increase for commercial real estate loans, primarily office loans, as well as an increase for credit card and auto loans, the bank said.

The Federal Reserve’s Board of Governors on Friday (Apr 14) said it has approved UBS Group’s acquisition of the US subsidiaries of Credit Suisse, clearing another major hurdle for the completion of the Swiss-brokered rescue deal. UBS has committed to give the US central bank an implementation plan for combining its US business and operations with those of Credit Suisse within three months of consummating the deal, the Fed’s Board said in a statement. The plan will include more stringent requirements including liquidity standards for the bank, due to the increased size of the institution, the statement said.

Deposits at US commercial banks rose in early April in a renewed sign of confidence in the banking sector after massive deposit outflows following last month’s failure of two large regional banks. Federal Reserve data released on Friday (Apr 14) showed deposits at all commercial banks rose to US$17.43 trillion in the week ended Apr 5, on a non-seasonally adjusted basis, from US$17.35 trillion a week earlier. The increase was about evenly shared between the largest 25 banks and the small and mid-sized banks. That left deposits at the largest banks above the levels prior to the collapse of Silicon Valley Bank and Signature Bank, but at small banks still short of their previous levels.

Apple is ramping up testing of fresh Macs with processors on par with the current M2 chip, making headway on key new machines that could help reverse a sales decline. The Mac maker has begun testing the new machines with third-party apps from the App Store to validate their compatibility, according to developer logs shared with Bloomberg News. That’s a necessary step in the run-up to the launch of a new device. Apple is counting on the new machines to entice shoppers after the worst Mac slump since the dot-com bust in 2000. Shipments plunged more than 40 per cent in the first quarter, according to IDC, making the Mac a laggard even in an industry suffering a sharp downturn across the board. Apple had telegraphed that the quarter would be weak, but it won’t provide its actual results for the period until May 4.

The dollar index bounced off a one-year low against a basket of currencies on Friday (Apr 14) after some March retail sales components were not as weak as some economists had feared, while a key Federal Reserve official warned that the U.S. central bank needs to continue hiking interest rates to bring down inflation. The US dollar rebounded from an initial drop after data showed that US retail sales fell more than expected in March as consumers cut back on purchases of motor vehicles and other big-ticket items. Core retail sales, which correspond most closely with the consumer spending component of gross domestic product, slipped 0.3 per cent last month.

Merck & Co said on Sunday it will buy Prometheus Biosciences for about US$10.8 billion, picking up a promising experimental treatment for ulcerative colitis and Crohn’s disease and building up its presence in immunology. Merck will pay US$200 per share for the California-based biotechnology company that specialises in treatments for autoimmune diseases. That represents a 75 per cent premium to the US$114.01 closing price for Prometheus shares on Friday.

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


Singapore Banking Monthly – SORA at record high but loan growth sluggish

Recommendation: Overweight (Maintained); Analyst: Glenn Thum

– March’s 3M-SORA was up 14bps MoM to 3.35%, 3M-SIBOR was down 2bps MoM to 4.19%.

– Singapore domestic loans dipped 3.10% YoY in February, below our estimates, while Hong Kong’s domestic loans declined 3.28% YoY in February. The CASA balance dipped slightly to 19.2% (Jan23: 20.0%).

– Maintain OVERWEIGHT. We remain positive on banks. Bank dividend yields are attractive at 5.7% with upside surprise in dividends due to excess capital ratios and push towards higher ROEs. SGX is another major beneficiary of higher interest rates [SGX SP, BUY, TP S$11.71].

Sembcorp Industries – Renewable energy to drive earnings and valuation

Recommendation: Buy (Maintained); TP: S$5.06, Last Close: S$4.30; Analyst: Peggy Mak

– SCI’s Singapore power capacity is nearly fully contracted till 2024. This provides visibility of earnings as Singapore accounts for more than 70% of revenue and SCI earns a spread on the sale of energy.

– Sale of the Indian power plants will not dent profit as the earnings foregone is compensated with interest income receivable from the buyer. But it will book a non-cash accounting loss of S$81mn in FY23e on reversal of currency translation and capital reserves.

– Renewable energy is the key growth driver, with 24% added capacity from end 2022, China re-opening and stronger energy demand in India. We maintain our BUY recommendation and raise TP to S$5.06 from S$3.68, based on 11x PE for FY24e.

FIRST REIT – Greener Pastures after Lease Restructuring

Recommendation: Non Rated; Analyst: Darren Chan

– We visited five of First REIT’s assets in Jakarta – four hospitals and a hotel & country club – over 21-22nd March 2023. All four of the hospitals we visited, Siloam Hospitals Lippo Village (SHLV), Siloam Hospitals Kebon Jeruk (SHKJ), Siloam Hospitals TB Simatupang, and Mochtar Riady Comprehensive Cancer Centre (MRCCC), were part of the 13 hospitals that had leases restructured effective Jan 2021 for a lease term of 15 years. The other asset visited was Imperial Aryaduta Hotel & Country Club (IAHCC), which is a non-core asset and is being marketed for sale. It has its lease expiring in Dec 2023.

PSR Stocks Coverage



For more information, please visit:


Upcoming Webinars

Guest Presentation by MindChamp PreSchool Limited [NEW]

Date: 18 April 2023

Time: 1pm – 2pm

Register: https://bit.ly/3Kc5bJl

Guest Presentation by Sabana Industrial REIT [NEW]

Date: 19 April 2023

Time: 12pm – 1pm

Register: https://bit.ly/3Gm29kD

Guest Presentation by KTMG Limited [NEW]

Date: 25 April 2023

Time: 12pm – 1pm

Register: https://bit.ly/3U87u4P

Guest Presentation by OUE Commercial REIT [NEW]

Date: 10 May 2023

Time: 12pm – 1pm

Register: https://bit.ly/3GzrdF3

POEMS Podcast:

Research Videos

Weekly Market Outlook: Technical Analysis, US 2Q 2023 Equity Strategy
Date: 10 April 2023
Click here for more on Market Outlook.
Sign up for our webinars here, and be among the first to receive economy and market updates.


Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
Click here for more on Phillip in 3 mins.

Follow our Socials

Facebook Social Icon Instagram Icon Twitter Social Icon Youtube Social Icon Linkedin Social Icon TikTok Social Icon Spotify Social Icon

Join our Singapore Equity Research Community on POEMS Mobile 3 App for the latest research reports, market updates, insights and more

Click to join!


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 揳s 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.

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  


Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com