Daily Morning Note – 2 July 2021
The S&P 500 ended at a record for the sixth straight session on Thursday as US stocks continued to rally as the reopening accelerates and economic data generally improves. All three major indices finished higher to open the second half of 2021 following reports showing a drop in jobless claims and continued expansion of the manufacturing sector, albeit at a slower pace. As the markets were closing, the International Monetary Fund upgraded its estimate for US growth in 2021 to seven percent, saying the world’s biggest economy had enjoyed a “remarkable recovery”. The Dow Jones Industrial Average gained 0.4 percent to 34,633.53.
Singapore’s tourism sector – both inbound and outbound – as vaccine roll-outs point the way towards a post-pandemic normal and Health Minister Ong Ye Kung indicated that residents may soon jet-set again. Heartened by recent plans to reopen international borders when vaccination rates increase, analysts also predict a pick-up in arrivals by the fourth quarter of this year. This is even as the Republic recorded its second straight month-on-month decline in visitors in May, as the latest data from the Singapore Tourism Board (STB) showed.
Singapore Exchange (SGX) on Thursday said it appointed Singapore Land Authority’s chairman Yeoh Oon Jin as a non-executive and independent director (ID) to its board, effective today. Mr Yeoh was formerly executive chairman of PricewaterhouseCoopers (PwC) Singapore, where he has served since 1986 before his retirement from the group on June 30, 2021. Separately, SGX announced that its board members Kwa Chong Seng and Kevin Kwok will both be considered non-independent from Sept 20 this year, on the account of each of them having completed nine consecutive years of service on the bourse’s board.
CapitaLand has sold two of its retail malls in the Greater Tokyo area, Olinas Mall and Seiyu & Sundrug Higashimatsuyama, for over 42 billion yen (S$520 million). At the same time, the property giant said it will invest about 7.5 billion yen to fully acquire a freehold site in Ibaraki City, Osaka. In a bourse filing on Thursday, CapitaLand said it expects to net a gain of close to nine billion yen from the recent sale of its two malls, which were divested above their total valuation.
Keppel Reit has divested its stake in its Brisbane property for A$275 million (S$277.4 million), the real estate investment trust (Reit) said on Thursday. The Reit’s 50 percent stake in 275 George Street was sold to Charter Hall Prime Office Fund, which currently holds the other 50 percent interest in the property. The contract of the sale was executed on June 30, 2021. Proceeds of the divestment will be used to repay debt and transaction costs to enhance capital efficiency and manage borrowing costs, and also for further growth opportunities, the Reit’s manager said.
Shinvest: BJW -1.56% on Thursday said it has further disposed of 245,491 shares in China-based fabless semiconductor firm Espressif Systems. The shares were put up for auction trading between June 28 and 30, on China Merchant Securities’ online platform, at 225.15 yuan per share. It generated net cash proceeds of 55.2 million yuan (S$11.5 million) for the group, the precision manufacturer said. The group said it will likely record a gain before tax of S$2.8 million from the disposal, based on its financial statements for the financial year ended Aug 31, 2020.
Oil prices rose roughly 2 percent on Thursday on indications that Opec+ producers could increase output more slowly than expected in coming months, while rising global fuel demand causes supply to tighten. Brent crude settled at US$75.84 a barrel, up to US$1.22, or 1.6 percent. US West Texas Intermediate crude settled at US$75.23 a barrel, gaining US$1.76, or 2.4 per cent.
WCG Clinical Inc, a clinical trial solutions company backed by Singapore’s sovereign wealth fund GIC, filed for an initial public offering (IPO) in the United States on Thursday and revealed a jump in its quarterly revenue. The company, which also counts buyout firm Leonard Green & Partners LP among its investors, plans to list on the Nasdaq. Private equity firm Arsenal Capital Partners is also an investor in the firm which helps clients reduce the time and cost of enrolling patients in clinical trials. The company’s revenue jumped by a third to US$137.6 million in the three months ended March 31, its filing showed. Net loss came in at US$20.6 million from US$30.1 million last year.
Boeing on Wednesday named former General Electric executive Brian West as its chief financial officer, more than two months after the planemaker announced the surprise retirement of long-time financial head Greg Smith. Mr West, who will take charge on Aug 27, spent 16 years at GE, where he served as CFO of its aviation and engine services businesses. His appointment comes as Boeing faces one of the most turbulent periods in its history, marked by a safety crisis followed by rising debt during the pandemic.
The Biden administration and global allies scored a major victory Thursday in their push for a more balanced international corporate tax system, but still face multiple significant obstacles to completing an ambitious plan that has been years in the making. The boost came during a round of talks hosted by the OECD, where 130 countries and jurisdictions backed a plan to set a minimum corporate tax rate and establish a new regime for sharing the taxes imposed on the profits of multinational firms, like Facebook and Alphabet’s Google. But the agreement remains well short of a done deal, with a handful of countries refusing to sign on. Key resistance came from three EU members, any one of which could prevent the 27-member bloc from implementing the plan.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Analyst: Chua Wei Ren
Recommended Action: Technical BUY
Propnex (SGX: OYY) strong upside is set to continue after a small correction based on the recent technical and price actions.
Buy spot: 1.60 Stop loss: 1.45 Take profit 1: 1.80 Take profit 2: 1.95
Starhill Global REIT
Analyst: Chua Wei Ren
Recommended Action: Technical BUY
Starhill Global REIT (SGX: P40U) ranging upside is set to break based on the recent strong technical and price action.
Buy spot: 0.575 Stop loss: 0.500 Take profit 1: 0.650 Take profit 2: 0.710
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