Daily Morning Note – 18 February 2022
Stocks in the Asia Pacific extended a global selloff early Friday as investors sought havens including sovereign bonds and gold on deepening worries about the security outlook in eastern Europe.
Australian shares retreated, while futures for Japan and Hong Kong pointed lower. U.S. contracts stabilized after the S&P 500 tumbled and the technology-heavy Nasdaq 100 shed 3%.
The U.S. ramped up warnings of a possible Russian attack on Ukraine, but Russian officials said no invasion was underway or planned. Government forces and Moscow-backed separatists in the conflict in eastern Ukraine accused each other of breaking cease-fire rules.
Stocks to watch: Genting Singapore
Integrated Resort (IR) operator Genting Singapore reported on Thursday (Feb 17) that net profit for its second half fell 49 per cent on year, due to lower visitorship as community Covid-19 cases rose. Net profit for the 6 months ended Dec 31, 2021, fell to S$95.1 million, down from S$185.9 million during the same period a year earlier. Revenue for the period was also 17 per cent lower, at S$512.5 million. Noting the “significant” decline in net profit, the operator of Resorts World Sentosa said: “Our IR experienced a decrease in visitorship, largely due to an increase in Covid-19 community cases and the recent emergence of the Omicron variant.”
Challenger Technologies reported on Thursday (Feb 17) lower net profit and revenue for its second half. Net profit for the IT product retailer fell 38 per cent to S$8.4 million during the six months ended Dec 31, 2021, down from S$13.6 million in the prior-year period. This came on the back of slightly lower revenue of S$147.4 million during the period, down 3 per cent from a year earlier.
Property development and investment group Sing Holdings reported on Thursday (Feb 17) a 24.7 per cent decline in net profit for its second half, despite higher revenue. Net profit for the six months ended Dec 31, 2021 fell to S$6.7 million from S$8.9 million in the prior-year period. On a per-share basis, earnings fell to S$0.0167 from S$0.0221. The decline in net profit came even as revenue rose 5.4 per cent during the period to hit S$66.5 million.
Amazon has reached a global agreement with Visa to settle a dispute over the credit card giant’s fees. The deal means Amazon customers in the U.K. can continue using Visa credit cards, as previously announced by the two companies. Amazon will also drop a 0.5% surcharge on Visa credit card transactions in Singapore and Australia, which it introduced last year. Last month, Amazon said it had dropped plans to stop accepting Visa credit cards in Britain, two days before the change was expected to take place. The companies said at the time that they would continue talks on a broader resolution to their spat.
Walmart on Thursday said shoppers turned to its stores for gifts and groceries during the holiday season, pushing company’s quarterly earnings beyond Wall Street’s expectations despite supply chain pressures and rising costs. The retailer said it is focused on value and new ways to make money, especially as tries to woo customers with low prices and attract investors with higher profits during a period of inflation. Walmart shares rose 4% Thursday to close at $138.88, despite a decline in the broader market due to rising tensions on the Russia-Ukraine border. The company reiterated its outlook, which was above average analyst forecasts.
Ford’s Mustang Mach-E, the automaker’s bold bet to lead its transformation into selling more electric vehicles, replaced the Tesla Model 3 as Consumer Reports’ “Top Pick” for an electric vehicle in 2022. The designation is further validation of CEO Jim Farley’s belief Ford can not only compete with Tesla but also beat Elon Musk when it comes to EVs. Jake Fisher, senior director of automotive testing at Consumer Reports, says he was impressed with the Mach-E as soon as the nonprofit group bought it. “Not only is it a really fun vehicle to drive, it is sporty, but it is also extremely mature,” Fisher told CNBC. “When I say that it rides nice, it is very quiet. I mean it really feels well built.”
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Recommendation: Accumulate (Maintained), Last done: S$36.80
TP: S$41.60, Analyst: Glenn Thum
– FY21 earnings of S$6.8bn met our estimates as higher fee income and strong loans growth offset lower NIMs. 4Q21 DPS rose 9% to 36 cents.
– NIM fell 6bps YoY to 1.43% but loan growth of 9% YoY cushioned NII. NIM remained flat QoQ. SPs down 1% to 67mn in 4Q21.
– Maintain ACCUMULATE with a higher GGM TP of S$41.60, up from S$35.90. We raise FY22e earnings by 2% as we raise NII estimates for FY22e. We now assume 1.79x FY22e P/BV in our GGM valuation, up from 1.56x, as we raise our ROE estimates to 13.0%. For FY22e, management guided benign provisions, continued growth in loans and stable NIMs. We believe there is upside to NIM guidance. A 50bps move in interest can raise our earnings by 13%.
Click the link to join: https://t.me/stocksbnb
For any research-related matters, email: firstname.lastname@example.org
For general enquiries, email: email@example.com
or call 6531 1555.
Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information
The information contained in this email is provided to you for general information only and is not intended to create any binding legal relation. The information or opinions provided in this email do not constitute investment advice, a recommendation, an offer or solicitation to subscribe for, purchase or sell any investment product. 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 should obtain advice from a financial adviser before making a commitment to invest in any investment product or service. In the event that you choose not to obtain advice from a financial adviser, you should assess and consider whether the investment product or service is suitable for you before proceeding to invest.
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.