Daily Morning Note – 18 July 2019

WEEKLY MARKET OUTLOOK WEBINAR

Register HERE for MONDAY’s 11.15am webinar.

Archived webinars available.

PHILLIP SUMMARY

U.S. stocks ended lower for a second straight session Wednesday as investors digested mixed earnings results and economic data, while a lack of progress on the Beijing-Washington tariff dispute remained a headache.

Bank of America reported better-than-expected results after gains in its consumer banking division but railroad CSX disappointed and its weak sales forecast aroused fears of a slump in freight rates, reflecting a slowing manufacturing sector.

The Dow Jones Industrial Average ended down 115.78 points at 27,219.85, a decline of 0.4%, the S&P 500 index lost 19.62 points, or 0.7%, to 2,984.42, while The Nasdaq Composite Index slipped 37.59 points to 8,185.21, a drop of 0.5%. The Dow Transportation Average fell 3.6%, its biggest one day fall since May, to 10,403.


TECHNICAL PULSE

Singtel Ltd

Recommended Action: Technical LONG

Based on the Elliott wave count on the 2nd July 2019 report, there are some notable changes base on the recent price action.

Read more technical pulse

RESEARCH REPORT

Keppel DC REIT – Stopped out by rich valuations

Recommendation: HOLD (Downgraded), Last Done: S$1.73

Target Price: S$1.71, Analyst: Natalie Ong

– Revenue and DPU in line with our forecast. 2Q19/1H19 DPU of 1.93/3.85 Scts
(+6.0%/+6.4% YoY) account for 24/28% of our FY19 DPU forecast.

– Potential acquisition of KDC SG 4 and repositioning of office space at KDC SG 5
from office to DC are catalyst for KDC.

– Downgrade to HOLD with a higher target price of $1.71 (previously $1.59) to
reflect better operational performance post-AEI, but downgrade KDC due to
rich valuations.


BREAKING NEWS

US housing starts fall further; permits at two-year low. Housing starts decreased 0.9 per cent to a seasonally adjusted annual rate of 1.253 million units last month as a rebound in the construction of single-family housing units was overshadowed by a plunge in multi-family homebuilding, the Commerce Department said. Data for May was revised slightly down to show homebuilding falling to a pace of 1.265 million units, instead of slipping to a rate of 1.269 million units as previously reported.

US plans different approach in leading G7 in 2020: White House official. The Trump administration plans to adopt shorter communiques and generally revamp how the Group of Seven rich nations does its work when the United States leads the body in 2020, a White House adviser said.

IMF warns rising trade-war risk is weighing on global economy. The report comes as the Washington-based fund confronts a surge in protectionism around the world that’s seen dragging on global growth, with output slowing in major economies from China to Europe and Mexico. IMF leadership also is in flux with Managing Director Christine Lagarde set to succeed Mario Draghi as president of the European Central Bank.

Oil prices fall more than 1% after US fuel inventories build. Brent crude futures were down 69 cents, or 1.1 per cent, to settle at US$63.66 a barrel. US West Texas Intermediate (WTI) crude futures fell 84 cents, or 1.5 per cent, to settle at US$56.78 a barrel. Both benchmarks shed more than 3 per cent on Tuesday. While data on Wednesday from the US Energy Information Administration showed a larger-than-expected drawdown in crude stockpiles last week, large builds in refined product inventories kept prices lower. US crude inventories fell 3.1 million barrels, EIA data showed, more than analysts’ forecasts for a decrease of 2.7 million barrels.

CCT proposes raising S$220m from private placement to fund German acquisition. Of the S$220 million to be raised, the bulk – S$216.7 million – would be used to partially fund the acquisition of a 94.9 per cent interest in the holding companies of a freehold office building in Frankfurt, Germany. This acquisition was announced on Wednesday morning. About S$3.3 million, which is approximately 1.5 per cent of the private placement gross proceeds, will be used to pay the estimated transaction-related expenses, including professional fees and expenses, incurred or to be incurred by CCT in connection with this fundraising exercise.

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

Webinar Of The Week

Market Outlook: (PSR) Ascott, SG Banking / Coal Monthly, US / China / Phillip Singapore Weekly, Technical

For more on Market Outlook

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information





Disclaimer
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 “as 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

IMPORTANT INFORMATION

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