Daily Morning Note – 2 Sep 2019
WEEKLY MARKET OUTLOOK WEBINAR
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PHILLIP SUMMARY
U.S. stock futures slumped when trading began Sunday evening. The yen climbed and the yuan edged lower after the new U.S. tariffs kicked in on Chinese goods and data showed further deterioration in China’s manufacturing sector.
U.S. equities saw their first monthly decline since May despite finishing mostly higher on Friday. American markets are closed for the Labor Day holiday. Key events this week include Australia setting monetary policy on Tuesday. Federal Reserve speakers include New York Fed’s John Williams on Wednesday and Fed Chairman Jerome Powell on Friday. The U.S. jobs report on Friday is projected to show nonfarm payrolls rose by 165,000 in August, slightly above the month prior, and for the unemployment rate to be steady at 3.7%.
BREAKING NEWS
US President Trump rattled Wall Street when he demanded U.S. firms move production out of China. But many have already taken steps to do so, and, in earnings calls just over the past month, dozens of chief executives have signaled plans to further diversify their supply chains amid the intensifying trade war.
US President Donald Trump said trade talks with Beijing are still planned for September after a new round of tariffs went into effect on Sunday.
Hong Kong protesters caused major disruptions to the city’s international airport Sunday, massing outside the building in attempt to paralyse transport to and from the facility, with the rail operator shutting some subway stations on Monday after they were damaged.
KEPPEL Land China is buying another completed commercial property in Beijing’s Haidan district through its acquisition of Beijing Shunxiangren Enterprise Management Co for around 178.6 million yuan (S$35.1 million).
Developer Bukit Sembawang Estates has sold 71 of the 78 homes of its Luxus Hills (Signature Collection)
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
TECHNICAL PULSE
Singtel Ltd
Recommended Action: Technical BUY
Singtel (SGX:Z74) had a strong bullish recovery based on the technicals.
– Strong bullish hammer rejection above the 88.6% Fibonacci level. This signify a strong bullish momentum ahead.
– Strong bullish candle confirmation above 88.6% on Friday.
– Stong bullish rejection above the support at 3.09.
– Falling wedge formation.
– RSI Bullish divergence.
RESEARCH REPORTS
Oversea-Chinese Banking Corp Ltd – Creation of Franchise Value in Greater China
Recommendation: ACCUMULATE (Maintained), Last Closing Price: S$10.65
Target Price: S$12.50, Analyst: Tin Min Ying
– We attended OCBC’s Greater China Media and Sell-Side Analysts Briefing in Hong Kong and Macau on the 13th and 14th August 2019.
– The event shared insights and updates on the Group’s growth and transformation journey in Greater China over the last 5 years, as well as plans to continue to grow in the region.
– Since the Wing Hang acquisition, earnings from Greater China tripled to 18% and AUM from wealth management tripled.
– Maintain ACCUMULATE at a slightly lower TP of $12.32 (previous TP: $12.50). We increased our credit cost assumptions to 23 bps (previously 20 bps), and lowered our loan growth estimate to 4.0% (previously 4.4%).
Webinar Of The Week
Date: 26 August 2019
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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