Daily Morning Note – 18 October 2018
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YOUR PHILLIP SUMMARY
Stocks ended modestly lower Wednesday after the release of minutes from the Federal Reserve’s last policy meeting, but remained above session lows. The weaker tone came a day after major indexes bounced back from technically oversold conditions, posting their biggest one-day jump since late March.
The minutes of the Fed’s September meeting, which sawpolicy makers deliver a widely expected quarter-point increase, showed that a majority of policy makers believe interest rates must continue to rise until policy becomes restrictive.
The Treasury Department refrained from calling China a ‘currency manipulator,’ a title that’s been threatened by multiple U.S. administrations but not used since 1994. In a report released Wednesday, Treasury said it has found no major trading partner met the criteria to be designated as intentionally manipulating its currency. But it kept China on a watch list along with Germany, Japan, Switzerland, Koreaand India.
President Trump plans to withdraw the U.S. from a 192-nation treaty that gives Chinese companies discounted shipping rates for small packages sent to American consumers, another escalation of the U.S. president’s economic confrontation of Beijing.
Source: MarketWatch, CNBC, Bloomberg
RESEARCH REPORT
First REIT – Waiting for a sign
Recommendation: NEUTRAL
Target Price: S$1.30
-NPI and DPU were in line with our forecast. 5.1% and 5.4% YoY boost in Gross Revenue and NPI, respectively, driven by two acquisitions made in 4Q17.
-Potential expanded ROFR pipeline and improvement in tenant concentration from proposed transaction announced in September.
-No marked improvement in outstanding receivables even accounting for the S$17.5mn of rental payments received on Oct 15 that was disclosed by FIRT.
-Maintain Neutral with lower TP of S$1.30.
BREAKING NEWS
Federal Reserve officials remain convinced that continuing to gradually increase interest rates is the best formula to preserve a steady economy, according to minutes released Wednesday of the central bank’s most recent policy meeting.
U.S. Commerce Secretary Wilbur Ross said Wednesday that U.S.-China trade talks are on hiatus.
The Urban Redevelopment Authority announced that the average size of new private flats outside the central area will have to be at least 85 sq m, with nine areas subject to an even more stringent minimum average requirement of 100 sq m.
The arrest of a senior executive at Lippo Group has thrown into doubt the future of its major development project – Meikarta – which is the Group’s only ongoing project.
Apple began allowing users in the U.S. to download a copy of all data they have stored with the company from a single online portal.
Tesla has signed an agreement with the Shanghai government for an 860,000-square metre plot of land to build its first overseas Gigafactory.
Total has signed a deal with Indian conglomerate Adani Group to re-enter the South Asian nation’s liquefied natural gas (LNG) market and build 1,500 retail service stations over the coming decade.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research
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