Daily Morning Note – 18 November 2021

PHILLIP SUMMARY

Stocks fell on concern that inflation could pose a challenge to the global economic rebound, forcing central banks to raise interest rates sooner than expected. Treasuries rose.

Traders took some risk off the table as data signaled homebuilders are struggling to break ground on projects amid high materials prices and ongoing labor shortages. Target Corp. sank after warning that cost pressures are creeping up, stoking fears they will dent profits at retailers. In late trading, Cisco Systems Inc., the biggest maker of computer networking equipment, slumped on a lackluster revenue forecast, hurt by a shortage of components that’s making it difficult to keep up with demand.


BREAKING NEWS

SG

Medical consumables supplier Medtecs International Corporation is warning that its 3QFY2021 earnings is “not expected to be as strong” as the first half of the year. It expects to remain profitable though. “This is mainly due to existing customers completing their stockpiling exercises in 2020, subsequent inventory adjustment attributable to certain customers, and the stabilization of the supply and prices of the PPE market globally,” says the company. “Notwithstanding the above, such market changes are not expected to have a material adverse impact on the overall financial position of the group, which remains healthy,” the company adds.

Mainboard-listed SMI Vantage on Wednesday (Nov 17) said it is planning to develop a non-fungible token (NFT) publishing business to tap the growing interest in crypto assets. The company noted that sales of NFTs – unique digital assets that can be traded online, often using cryptocurrency – surged to US$10.7 billion in the third quarter of 2021. Market tracker DappRadar noted that this was a more than eightfold increase from the previous quarter. In a bourse filing on Nov 17, SMI Vantage said it has signed a memorandum of understanding with Nasdaq-listed substantial shareholder The9 Limited to explore developing the NFT publishing business. It added that it expects to conclude finalisation of the plans “within the next few weeks”.

Mooreast Holdings, a mooring systems company, on Wednesday (Nov 16) launched its initial public offering (IPO) for a listing on the Catalist board of the Singapore Exchange (SGX). The company will offer 0.8 million offer shares and 38.05 million placement shares at S$0.22 apiece. This will bring the total gross proceeds from the IPO to some S$8.5 million. EDBI, the investment arm of Singapore’s Economic Development Board, has invested S$10 million in the company as a pre-IPO investor.

Medtech firm QT Vascular on Wednesday (Nov 17) announced that it will hold an extraordinary general meeting (EGM) on Dec 2 to seek shareholders’ approval for the appointment of 5 new directors. This comes a day after the company said it had received a notice of intention from Mission Well Limited and Tansri Saridju Benui, who together hold more than 10 per cent of the company, to call for an EGM to remove QT Vascular’s 4 current board members, including executive director and chief executive officer Eitan Konstantino.

US

Apple announced a new self-service repair program on Wednesday that will let customers buy parts to fix their own iPhones or Macs. The program will first allow iPhone owners to replace their screen, battery or camera, with more parts coming later. The move appears to be a big win for “right-to-repair” advocates and is an about-face for Apple. Repair shops and lobbyists who support repair reform have called on lawmakers to implement a variety of rules that would allow for increased access to manuals and official parts. But Apple has lobbied against allowing customers to fix their own products over the years, specifically citing concerns with safety or performance issues from third-party parts. It also sells a subscription AppleCare+ service for its products that offers consumers repairs at a lower cost than non-subscribers.

Target shares fell Wednesday, as the big-box retailer opted to emphasize its focus on value as prices of groceries, fuel and other goods rise. Shares were down about 4% in premarket trading, despite beating earnings expectations for the fiscal third quarter. Target CEO Brian Cornell said on a call with reporters that the company is absorbing some of the higher costs it’s seeing, rather than passing it on to customers. That strategy could squeeze margins. Target topped analysts’ predictions as sales jumped 13% after shoppers bought Halloween costumes, stocked up on back-to-school supplies and kicked off the search for holiday gifts early. It also raised its fourth-quarter forecast, predicting comparable sales could rise at between a high-single digit and low double-digit pace in the holiday period. Previously, it estimated a high single-digit increase.

Amazon plans to stop accepting payments made via Visa credit cards issued in the U.K. starting next year. The e-commerce giant has told some customers that, from Jan. 19 onward, the company will no longer accept Visa credit cards issued in Britain ” due to the high fees Visa charges for processing credit card transactions.” Visa shares fell 2.5% in U.S. premarket trading.

Cisco shares tumbled as much as 8% in extended trading on Wednesday after the computer networking company reported quarterly revenue that fell short of analysts’ expectations and issued weaker-than-expected guidance. Cisco said per-share earnings in the fiscal second quarter will be between 80 cents and 82 cents, excluding some items, on 4.5% to 6.5% annualized revenue growth. Analysts polled by Refinitiv had expected 82 cents per share in adjusted earnings on $12.85 billion in revenue, which implies 7.4% growth.

Lowe’s beat analysts’ expectations for fiscal third-quarter earnings on Wednesday, as the company got a bump in business from home professionals and online sales. The home improvement retailer raised its forecast, saying it anticipates $95 billion in sales. It had previously predicted revenue of $92 billion. Shares rose about 2% in premarket trading. Lowe’s profits rose to $1.90 billion, or $2.73 per share, from $692 million, or 91 cents a share, a year earlier. The results outmatched the $2.36 per share expected by analysts surveyed by Refinitiv.


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

Keppel Corporation – Rival bid for SPH weigh despite strong 3Q21 performance

Recommendation: Buy (Maintained), Last Done: S$5.30

Target price: S$7.07, Analyst: Terence Chua

– Singapore Press Holdings (SPH SP, Non-rated) (SPH) and Cuscaden Peak (Cuscaden) have entered into an implementation agreement to privatise SPH via a scheme of arrangement, after Cuscaden raised its offer to $2.36-2.40 per share.

– We compared the two offers. Despite offering more certainty of deal completion and the shortest time to payout under Keppel’s offer, we believe SPH shareholders will likely go for Cuscaden’s offer as this provides a higher total consideration value and value certainty.

– Maintain BUY with unchanged SOTP TP of S$7.07. We valued the Group based on the four new segments unveiled during Vision 2030 to better reflect the Group’s reporting segments going forward. Our TP translate to about 1.0x FY22e book value, in-line with its 5-year average. Catalysts expected from SPH resolution and a successful resolution to its O&M unit.

Technical Pulse: ASM Pacific Technology Ltd

Recommended: Technical BUY; Analyst: Chua Wei Ren

ASM Pacific Technology Ltd (HKEX: 522) has been on a corrective downtrend since January 2021. Recent technicals indicate that there is a potential upside in prices

Buy spot: 86.00 Stop loss: 76.20 Take profit 1: 100.20 Take profit: 110.00



Technical Pulse: Ming Yuan Cloud Group Holdings Ltd

Recommended: Technical BUY; Analyst: Chua Wei Ren

Ming Yuan Cloud Group Holdings Ltd (HKEX: 909) has been on a corrective downtrend since February 2021. Recent technicals indicate bullish upside

Buy spot: 26.60 Stop loss: 20.00 Take profit 1: 40.20 Take profit: 43.30



Technical Pulse: Visa Inc.

Recommended: Technical BUY; Analyst: Chua Wei Ren

Visa Inc (US: V) downtrend has been ongoing after it broke off the larger rising wedge which starts from 27th March 2020 to 26th July 2021. Despite the ongoing downtrend, Visa’s technical indicate that there is a short term rebound to test the higher gap resistance zone at US$225.26-US$231.12:

Buy spot: 205.06 Stop loss: 197.00 Take profit 1: 220.34 Take profit 2: 230.41



POEMS Podcast: Let the Money Talk

Recent Podcasts:

Daily Morning Note – November 17, 2021

Daily Morning Note – November 16, 2021



Visit www.stocksbnb.com to learn more!


Join our Phillip Securities Research Telegram channel for the latest update on our stock coverage!

Click here to join: https://t.me/stocksbnb


Webinar Of The Week

Weekly Market Outlook: Lendlease, Sunpower Group, Comfort DelGro, PropNex, Starhub, SPH, SG Weekly..

Date: 15 November 2021

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation

For more videos on Phillip in 3 Mins


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 揳s 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