Daily Morning Note – 17 Sep 2019

WEEKLY MARKET OUTLOOK WEBINAR

PHILLIP SUMMARY

The euro jumped half a percent on Thursday after the European Central Bank refrained from hinting at an interest rate cut, merely pushing back the timing of its first post-crisis rate hike.

The euro rose because investors had expected an even more dovish signal from the ECB and for the central bank to acknowledge weakness in economic growth.

U.S. Treasury yields fell on Monday after drone attacks on Saudi oil production facilities escalated tensions in the Middle East and pushed investors toward safer assets like government debt.

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.862%, while the yield on the 30-year Treasury bond fell to 2.334%. The 10-year yield had posted its largest weekly rally since November 2016 as fears of an impending economic downturn eased.



BREAKING NEWS

The Monetary Authority of Singapore (MAS) announced today that Singapore’s average daily foreign exchange (FX) trading volume reached a new high of US$633 billion in April 2019, up 22% from US$517 billion in April 2016. Singapore retains its position as one of the largest FX centres globally – ranked third with a 7.6% share of global FX volume in April 2019. These figures were released today in the 2019 Triennial Central Bank Survey of the global FX and over-the-counter (OTC) derivatives markets conducted by the Bank for International Settlements (BIS).

Local business confidence dropped to a near two-year low for the final quarter of 2019, according to Singapore Commercial Credit Bureau (SCCB)’s latest Business Optimism Index study, with manufacturing and wholesale trade braced for a downturn. Business sentiment dipped from +6.91 percentage points in Q3 to +4.82 percentage points in Q4. Year-on-year, it nearly halved from +9.19 percentage points in Q4 2018.

Singapore’s Court of Appeal has dismissed an appeal filed by entities related to fund manager Crest Capital Asia in a lawsuit with OUE Lippo Healthcare (OUELH) regarding the appointment of receivers over certain OUELH subsidiaries.

Mapletree Investments and Mapletree Industrial Trust (MIT) are set to acquire a North America data centre portfolio worth US$1.37 billion from data centre provider Digital Realty. Mapletree Investments and MIT have formed a 50:50 joint venture (JV) to buy 10 powered shell data centres (called the Powered Base Building data centres) from Digital Realty for US$557.3 million.

The Hong Kong bourse’s unsolicited takeover bid for the London Stock Exchange Group Plc suffered a further setback after China praised the British firm’s scathing rebuff. The official People’s Daily wrote on Saturday that there are “persistent worries” about Hong Kong given the current unrest, and lauded the LSE for citing its existing tie-up with the Shanghai Stock Exchange as its preferred way to access China.

The closing date of the S$0.45 a share offer for Star Pharmaceutical has been extended to 5.30pm on Oct 7. As at 5pm on Sept 16, the number of valid acceptances and total number of shares owned, controlled or agreed to be acquired by the offeror and its concert parties amount to a shareholding of 82.37 per cent.

Independent auditors RSM Chio Lim LLP has drawn an emphasis of matter on a material uncertainty in USP Group‘s FY2019 financial results which may cast doubt on its ability to continue as a going concern, the company said in a bourse filing on Saturday. The auditors noted that for the year ended March 31, 2019, the group’s total current liabilities exceeded total current assets by S$15.5 million, and it had incurred a net loss of S$23 million while having negative cash and cash equivalents of S$1 million.

Sydney-headquartered Lendlease Group has lodged a prospectus to list a new Reit (real estate investment trust) – Lendlease Global Commercial Reit – on the Singapore Exchange’s (SGX) main board. About 387.5 million units at $0.88 each will be offered under the initial public offering (IPO) and a placement tranche. The Reit will initially consist of leasehold retail mall 313@Somerset in Singapore and freehold office property Sky Complex, which comprises three buildings, in Milan, Italy. The Reit’s portfolio has an appraised value of about $1.41 billion.

Regional property and lifestyle group Wing Tai Holdings said on Monday that a trustee of its wholly-owned subsidiary WT DC Trust II has agreed to buy a freehold data centre in Australia for A$51 million (S$48.2 million). Evergreen Nominees (Victoria) is the seller of the data centre, which is located within Tally Ho Business Park in Victoria.

Moody’s has downgraded Hong Kong’s rating outlook to negative, citing growing risks to the Asian financial hub’s institutional strength, but maintained its current rating in a break with the recent downgrade by rival Fitch Ratings.

Developers in Singapore moved 1,122 private homes in August 2019, down 4.8 per cent from the 1,179 units they sold in the previous month, but 81.8 per cent higher than the the 617 units sold in August 2018.

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

TECHNICAL PULSE

Kirby Corp

Recommended Action: Technical SELL

Kirby Corp (US: KEX) bullish momentum in August was strong with strong daily bullish candle pushing to 85.00. However, technicals suggest a potential downside correction

Read more research reports

Webinar Of The Week

Market Outlook: : (PSR) Singapore Banking, Clearbridge Health Limited, Micro-Mechanics, Singapore Weekly, US Weekly, China Weekly, Technicals

Date: 09 September 2019

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Phillip Research in 3 minutes: #14- Singapore Banking Sector

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