Daily Morning Note – 17 March 2021

PHILLIP SUMMARY

Asian stocks edged lower at the open Wednesday as investors weigh the strength of the economic recovery in anticipation of the Federal Reserve’s policy statement. Benchmark Treasury yields hovered near their highest levels in over a year.

Equity benchmarks headed lower in Japan, Australia and South Korea. U.S. equity futures fluctuated. The S&P 500 closed lower after three sessions of record-breaking gains, as the energy and industrials sectors weakened. Apple Inc. and Microsoft Corp. lifted the tech-heavy Nasdaq 100, while the Dow Jones Industrial Average also fell from a record high.

The Treasury 10-year yield crept up to 1.63% as the Fed began its two-day policy meeting and a 20-year bond auction drew strong demand. Market-implied inflation expectations are at 12-year highs, and oil ticked up toward $65 a barrel.

BREAKING NEWS

SG

ComfortDelGro (CDG) is committing S$50 million to clean-energy technology and research over the next five years. In a newly-inked Memorandum of Understanding with the National University of Singapore (NUS), CDG will invest about S$10 million in a mobility-focused CDG-NUS Smart & Sustainable Mobility Living Lab, CDG said in a statement on Tuesday. The lab will focus on energy sustainability, integrated urban mobility, as well as smart and intelligent mobility technologies. It will research, test and analyse mobility technologies to generate insights that could later be implemented in solutions for the mass market.

Frasers Logistics & Commercial Asset Management, the manager of Frasers Logistics & Commercial Trust (FLCT), is now in talks for potential acquisitions of assets in the United Kingdom. However, it stated in a regulatory filing on Tuesday that there is no certainty that any deal will arise from these discussions. It was responding to a news report headlined “Singaporean buyer leads £1 billion UK business park rush” about a possible acquisition of a major office and logistics park in the Midlands, UK. The manager reviews acquisition opportunities to enhance unitholder value as part of FLCT’s business and may from time to time enter into discussions with vendors for potential acquisitions of assets, it stated.

For a second straight day on Tuesday, Aztech Global’s stabilising manager purchased shares of the counter in the open market. United Overseas Bank, the stabilising manager, bought 3.6 million shares at S$1.23 to S$1.28, after having bought 10 million shares at S$1.28 the day before. The moves by the bank follow Aztech Global’s debut on the Singapore Exchange’s mainboard at S$1.28 on March 12. In a regulatory statement on Tuesday, UOB informed the bourse operator about the support it has given the counter.

US

U.S. retail investors are buying the American depositary receipts of German automaker Volkswagen AG, some market participants said, accelerating a rally spurred by well-received VW announcements on its efforts to overtake Tesla Inc in the electric vehicles market. Volkswagen’s U.S.-listed stock rose nearly 17% on Monday and Tuesday. By contrast, its preference shares, which comprise its main class of stock, gained almost 9% during the same period in Frankfurt.

The Cboe Volatility Index, known as Wall Street’s “fear gauge,” slipped to a fresh COVID-19 pandemic low on Tuesday, as U.S. stocks soared to new highs on expectations that fiscal stimulus and signs of progress in a countrywide vaccination drive will spur a broader economic rebound. The VIX was recently down 0.54 points at 19.49, its lowest since Feb. 21, 2020, days before the World Health Organization declared the coronavirus outbreak a global pandemic. A pandemic-fueled tumble that shaved about a third of the value off the S&P 500 last March pushed the VIX index to a near-record high of 85.47, a level it only topped during the global financial crisis.

Mastercard Inc and Visa Inc on Tuesday postponed plans to raise the fees U.S. merchants pay when customers use cards online until April next year, as businesses continue to struggle during the COVID-19 pandemic. “Mindful that some merchants are still facing unprecedented circumstances…we are delaying our previously announced interchange adjustments in the U.S. until April 2022,” Mastercard said. Interchange fee is the charge a merchant pays to the card-issuing bank every time a consumer swipes their card. Visa said in an email it would not make any future rate changes in the U.S. for another year while the economy recovers.

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

TECHNICAL REPORTS

ComfortDelGro Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

ComfortDelGro Ltd (SGX: C52) Sell-call on 11th February was met with a loss after prices fails for break below the $1.56 support. Prices then proceed with a strong bullish upside by breaking the then resistance zone at $1.62-$1.64. Technical shows further potential upside:

>> Read more Technical reports

HK Reports – Read up on our Hong Kong reports here

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