Daily Morning Note – 18 March 2021

PHILLIP SUMMARY

Most Asian stocks looked poised to climb Thursday after U.S. equities and bonds rallied on the Federal Reserve’s projections for rates to remain near-zero through 2023.

The S&P 500 Index rose to a fresh record and Treasuries advanced as Fed Chairman Jerome Powell reiterated the central bank’s tolerant stance on inflation and the recent rise in yields. Consumer discretionary, industrial and materials sectors led the benchmark index’s gains. The Dow Jones Industrial Average also closed at an all-time high. Futures gained in Japan and Hong Kong, and were little changed in Australia.

Yields on shorter-dated Treasuries eased from intraday highs based on rising expectations of more-aggressive rate hike projections. Longer-dated yields also fell, with the 10-year pulling back from a session peak of 1.69% and the 30-year subsiding from its highest levels since 2019. The dollar weakened versus most major peers.

BREAKING NEWS

SG

Ascendas Real Estate Investment Trust (Ascendas Reit) is looking to acquire 11 Europe data centres for S$904.6 million. The purchase will boost the Reit’s exposure to data centres to 10 per cent of its total investment properties, from 4 per cent as at Dec 31, 2020. The purchase consideration comprises £250.3 million (S$460.4 million) for four data centres in the United Kingdom and 276.9 million euros (S$444.3 million) for the remaining data centres: three in the Netherlands, three in France and one in Switzerland.

Mapletree Logistics Trust intends to acquire two yield-accretive warehouses in Maharashtra, India for 4.55 billion rupees (S$84.4 million). Its manager, Mapletree Logistics Trust Management (MLTM), announced in a regulatory filing on Wednesday the proposed acquisition – its first in India – of a four-block, single-storey ambient warehouse and a two-block, single-storey ambient warehouse in Pune, both purpose-built with modern logistics specifications.

Jardine Cycle & Carriage has made an unconditional voluntary buyout offer of Bursa-listed Cycle & Carriage Bintang (CCB), a Mercedes-Benz dealer with a network of 12 outlets in Malaysia. The company listed in Singapore stated in a regulatory filing to the Singapore Exchange on Wednesday that it holds 59.1 per cent of the issued share capital of CCB, and is offering to acquire the stakes that it does not own at RM 2.40 (S$0.78) a share or RM 98.9 million in total if there is full acceptance.

US

US homebuilding dropped to a six-month low in February as severe cold gripped many parts of the country, in a setback for a housing market that remains supported by extremely lean inventories amid strong demand for larger homes. Housing starts fell 10.3 per cent to a seasonally adjusted annual rate of 1.421 million units last month, the lowest level since last August, the Commerce Department said on Wednesday.

Google on Tuesday said it will halve the controversial fee it charges developers at its online shop for digital content tailored for Android-powered mobile devices. The commission taken at Google Play will be reduced to 15 per cent from 30 per cent starting in July, but just on the first US$1 million of revenue taken in annually by a developer, according to post by product management vice president Sameer Samat.

Honda Motor said late Tuesday supply chain issues will force a halt to production at a majority of US and Canadian auto plants for a week. The Japanese automaker added the issue will result in some production cuts next week at all US and Canadian plants, citing “the impact from Covid-19, congestion at various ports, the microchip shortage and severe winter weather over the past several weeks”.

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

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