Daily Morning Note – 2 June 2021

PHILLIP SUMMARY

Asian stocks look set for a steady open Wednesday after U.S. equities inched lower as the tussle between economic optimism and inflation concern continues to play out in markets. Treasury yields edged up.

Futures rose modestly in Japan and Australia but dipped in Hong Kong. The S&P 500 and Nasdaq 100 closed with small losses after U.S. manufacturing data topped estimates but also signaled supply shortages and labor constraints. U.S. equity contracts slipped.


BREAKING NEWS

SG News

Ascott Trust (ART) will acquire three rental housing properties in Japan for 6.78 billion yen (S$85.2 million), it said on Tuesday. The properties – City Court Kita 1 jo, Big Palace Minami 5 jo and Alpha Square Kita 15 jo – have a total of 411 units and are located in central Sapporo. Their average Ebitda (earnings before interest, tax, depreciation and amortisation) yield is about 4 per cent, the stapled hospitality group added.

Mapletree NAC Trust’s (MNACT) trustee on May 31 priced S$250 million of perpetual securities at a distribution rate of 3.5 per cent to yield 252.7 basis points over the five-year swap offer rate. The perps, MNACT’s first, were sold at par and may be called by the issuer after five years, DBS, as trustee, said on Tuesday. Swap transactions will be entered into to swap the Singapore dollar distribution rate into Japanese yen fixed interest rate, the trust’s manager said.

Top Glove‘s plan to list in Hong Kong to raise up to US$1 billion has been delayed as the world’s largest rubber glove maker seeks to resolve a US import ban on its products, sources with direct knowledge of the matter said. The Malaysian firm, which is already listed in Kuala Lumpur and Singapore, flagged in late April it would sell 793.5 million shares in the listing, half what the company proposed in its application to the Hong Kong Stock Exchange in February. However, the deal has stalled as the company awaits indications from US Customs and Border Protection on whether an imports ban would be lifted any time soon, the sources said.

Raffles Medical has partnered a subsidiary of China Life Insurance (Group) to boost collaborations in China’s healthcare market, as part of its continued expansion there. In a joint statement on Tuesday, the group said it has signed a memorandum of understanding with China Life Healthcare Investment Company (CLHI), a healthcare investment platform and service provider. Both parties will look at initiatives across several areas, including collaborations in the provision of medical services, healthcare management, training and development as well as healthcare financing through insurance, with a focus on supporting ageing populations.

US News

The price of Tesla vehicles is increasing due to supply chain pressures across the auto industry, particularly for raw materials, Elon Musk said on Monday in response to a tweet. “Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially,” Mr Musk said in a tweet.

Johnson & Johnson must pay a US$2.1 billion award to women who claimed its baby powder was contaminated with cancer-causing asbestos, after the US Supreme Court left intact the largest verdict in the almost decade-long litigation over the iconic product. The top US court without comment on Tuesday refused to consider J&J’s objections to a St Louis jury’s 2018 finding that its talc-based powder helped cause ovarian cancer in 20 women.

Gold prices rose to a near five-month high on Tuesday, boosted by a weaker dollar and growing inflationary pressures, while investors awaited more US data to gauge the extent of global economic recovery. Spot gold was up 0.2 per cent at US$1,911.45 per ounce by 2.55am GMT, after hitting its highest since Jan 8 at US$1,914.26 earlier in the session. US gold futures rose 0.5 per cent to US$1,914.20 per ounce.

US manufacturing expanded at a faster pace in May, propelled by stronger orders growth that underscores sustained, robust demand. A measure of factory activity rose to 61.2 from 60.7 a month earlier, according to data released Tuesday by the Institute for Supply Management. Readings above 50 indicate expansion, and the May figure was about in line with projections. The report also showed still-elevated input prices and a fresh high in order backlogs. The increase in the group’s gauge of new orders – just below a more than 17-year high – and the longest delivery times since 1974 indicate manufacturers continue to struggle with supply shortages, shipping delays and difficulty finding skilled labour.


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

TECHNICAL PULSE

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