Daily Morning Note – 19 January 2022

Welcome to our Daily Morning Note from our Research team!

PHILLIP SUMMARY

Markets in Asia largely closed lower on Tuesday (Jan 18) as investor sentiment weakened due to inflation concerns. The Straits Times Index (STI) broke its 8-day winning streak to close down 0.2 per cent, or 7.91 points, at 3,280.04. Within the region, Hong Kong’s Hang Seng index closed down 0.4 per cent while the Jakarta Composite Index lost 0.5 per cent and South Korea’s Kospi fell 0.9 per cent. Tokyo’s Nikkei 225 fell 0.3 per cent.

Wall Street stocks endured an ugly session on Tuesday, tumbling in their first session back after a holiday weekend on mounting worries about higher lending rates. The Dow Jones Industrial Average finished down 1.5 per cent at 35,368.47. The broad-based S&P 500 shed 1.8 per cent to 4,577.13, while the tech-rich Nasdaq Composite Index sank 2.6 per cent to 14,506.90.

Stocks to watch: Halcyon Agri Corp


BREAKING NEWS

SG

Epicentre Holdings plans to delist without making an exit offer, the former authorised reseller of Apple products announced in a bourse filing on Tuesday (Jan 18). The announcement came after a hearing on Thursday (Jan 13), when the High Court ordered that its judicial management order be discharged and that the company be wound up. According to Singapore Exchange (SGX) rules binding applications for delisting, the company should convene a general meeting to obtain shareholder approval and make an exit offer to shareholders.

Mainboard-listed rubber producer Halcyon Agri Corp expects to return to profitability for the financial year to Dec 31, 2021, the board said in a guidance on Tuesday (Jan 18). It attributed the expected post-tax profit to “overall improvement in business conditions, particularly the recovery of downstream industrial activities”. It had run up an unaudited post-tax loss of S$61.0 million in the year-ago period, which amounted to a full-year net loss of S$54.2 million, excluding minority interests.

The maiden state tender for private housing sites, coming after the mid-December property cooling measures, has drawn mixed results. The 8 bids received for a District 15 plot at the corner of Jalan Tembusu and Tanjong Katong Road, as well as the highest bid (from City Developments or CDL) of S$1,302 per square foot per plot ratio (psf ppr), were at the upper end of the range forecast by property consultants polled by The Business Times in the week before the tender closed on Tuesday (Jan 18, 2022). This took into account the impact of the cooling measures. A plot near Lentor MRT station near Ang Mo Kio fetched 4 bids, with the highest (from a tie-up involving entities of Hong Leong Group Singapore, and mainboard-listed GuocoLand) at S$1,060 psf ppr. This price is closer to the lower end of the S$980-1,200 psf ppr forecast by property consultants in the BT poll.

US

ExxonMobil pledged on Tuesday to reach “net zero” greenhouse gas emissions in its operations by 2050, but stopped short of extending the promise to products it sells throughout the global economy. The petroleum giant’s promise covers “Scope 1” and “Scope 2” emissions, which account for carbon emissions from ExxonMobil operations, as well as emissions associated with the purchase of heating or cooling at its facilities, according to a company press release. But the US oil giant, which has long been criticised by environmentalists over its climate record, avoided targets on “Scope 3” emissions, which are those from products sold, such as the gasoline consumers buy.

Microsoft said it’s buying Activision Blizzard in a US$68.7 billion deal, uniting two of the biggest forces in video games. In its largest purchase ever, Microsoft will pay US$95 a share in cash for one of the US’s biggest gaming publishers, known for titles like Call of Duty and World of Warcraft but which is also grappling with a cultural upheaval over its treatment of women. Activision chief executive officer Bobby Kotick will continue to serve in that role, Microsoft said. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, who heads Microsoft Gaming.

Goldman Sachs Group fourth-quarter profit fell nearly 13 per cent and missed market expectations on Tuesday as weak trading activity dampened a bumper year for deals, sending the shares of Wall Street’s premier investment bank down 3 per cent. Goldman’s trading unit reported a lower profit in the quarter ended Dec 31 compared with last year as a more stable economy resulted in less volatility and fewer swings in financial markets. The global markets business, which now houses the trading business and accounts for roughly a third of overall revenue, reported revenue of nearly US$4 billion, down 7 per cent. Compared with a strong year-ago quarter when trading volumes skyrocketed, the bank said equity underwriting revenue fell 8 per cent in the quarter due to lower income from secondary stock offerings.

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

Fortress Minerals Ltd – Bogged down by weaker iron ore prices

Recommendation: ACCUMULATE (Maintained); Last Done: S$0.44

TP: S$0.50; Analyst: Vivian Ye

– 3Q22 results were below expectations. Revenue and PATMI were at 20%/12% of our FY22e forecast as ASPs were lower than expected.

– 3Q22 sales volume increased 35.3% YoY. Unit costs decreased accordingly.

– Maintain ACCUMULATE with a lower TP of S$0.50, down from S$0.51. We lower FY22e PATMI by 29.6%, factoring in weaker iron ore prices and higher operating expenses. We lower ASPs by 8% to US$110/DMT. Our TP remains pegged to the industry average, which is now 10x FY22e PE, up from 8x previously.

POEMS Podcast: Let the Money Talk

Recent Podcasts:

Bonus Track – CNY Edition

Daily Morning Note – January 14, 2022

Daily Morning Note – January 13, 2022

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: DBS, UOB, Ascott, Frasers, City Development, LHN, Del Monte & More

Date: 17 January 2022

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