Daily Morning Note – 2 September 2021

Dear valued client,

With US and global economic data sending differing signals as the surge of Covid-19 infections continues to take a toll on the recovery, Wall Street equities ended mixed on Wednesday.

Weak private hiring data along with solid growth in manufacturing that was held back by difficulty finding workers were key factors for investors awaiting the Labour Department’s jobs report for August due Friday.

The benchmark Dow Jones Industrial Average slipped 0.1 per cent to close at 35,312.53, while the broad-based S&P 500 ended essentially flat at 4,524.09.

But the tech-rich Nasdaq Composite Index gained 0.3 per cent to kick off September by finishing at an all-time high of 15,309.38.

US stocks have posted steady gains and a series of records for months, as the economy has roared back from the worst of the pandemic shutdowns.


BREAKING NEWS

We are ceasing coverage of Clearbridge Health Ltd and Micro-Mechanics Holdings Ltd with immediate effect due to a reallocation of resources. The previous recommendation can no longer be relied upon.


SG News

Singapore Exchange Ltd (SGX) is in advanced stages on unveiling new guidelines that will make it easier for special purpose acquisition companies (SPACs) to list in the city-state after receiving market feedback that some proposals were too strict, four sources familiar with the matter told Reuters on Wednesday. SGX’s regulatory arm is considering easing a minimum S$300 million market value proposal for SPACs and a proposal that warrants cannot be detached from underlying shares, said two of the sources who declined to be identified as they were not authorised to speak about the matter. The moves by SGX come as the bourse has struggled to capture large listings of high-growth companies and faces prospects of losing out in courting South-east Asian startups looking to list in their home markets or in the United States.

Eagle Hospitality Trust (EHT) trustee DBS Trustee on Wednesday said in a regulatory filing that the highest and best offer received for EHT’s Delta Woodbridge Hotel (DW) in New Jersey, USA, was US$23.5 million. This was following three months of marketing efforts by the engaged commercial real estate brokerage company, Eastdil Secured. In addition, on the application of Wells Fargo National Association, the Superior Court of New Jersey entered a final judgement for the foreclosure of the DW in the amount of approximately US$37.6 million on July 23. This will be partially offset by the proceeds of the sale of the property. The outstanding balance of the DW mortgage loan will continue to be payable by EHT.


US News

Social media giant Facebook will invest US$1.5 million in Argentine media to train journalists and promote online development, a first in Latin America. The agreement signed last week with almost 150 media outlets will allow 3,000 journalists to be trained, while also helping Facebook develop commercial agreements. It’s part of the “Facebook Journalism Project” that involves collaboration with media all over the world. The three-year Argentine investment aims “to support almost 150 media of every size and region in the country,” Julieta Shamma, Facebook’s head of strategic media partnerships in Latin America, told AFP. The agreement involves commercial commitments with around 30 Argentine outlets including Clarin, La Nacion, Pagina12 and Infobae to attract more links to the Facebook platform.

US construction spending picked up in July, lifted by gains in both private and public sector projects. The Commerce Department said on Wednesday that construction spending increased 0.3 per cent after being unchanged June. Construction spending rose 9.0 per cent on a year-on-year basis in July. Economists polled by Reuters had forecast construction spending gaining 0.2 per cent. Spending on private construction projects rose 0.3 per cent after increasing 0.4 per cent in June. Outlays on residential projects advanced 0.5 per cent, with single-family homebuilding spending increasing 0.9 per cent, driven by robust demand for housing. Spending on residential projects increased 0.8 per cent in June. The pace is, however, slowing because of expensive building materials as well as land and labour shortages.

OPEC and its allies agreed to stick to their existing plan for gradual monthly oil-production increases after a brief video conference. Ministers ratified the 400,000 barrel-a-day supply hike scheduled for October, delegates said. The group took less than an hour to reach an agreement, one of the quickest meetings in recent memory and a stark contrast to the drawn-out negotiations seen at the cartel’s previous talks in July. “Opec have proven once again that they can meet and do things seamlessly,” Christyan Malek, head of oil and gas and JPMorgan said on Bloomberg TV. “It’s likely that harmony is going to be utilized” to respond flexibly to any further shifts in the market over the coming year, he said. With crude prices mostly recovered from their mid-August slump and the supply outlook relatively tight for the rest of the year, the group has little reason to change the established schedule of gradual monthly supply hikes.


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

TECHNICAL REPORTS

Hour Glass Ltd/The

Recommended Action: Technical BUY

Analyst: Chua Wei Ren

– Hour Glass Ltd/The (SGX: AGS) technical indicate a strong bullish breakout after much consolidated range movement since late June 2021.

– Buy spot: 1.49 Stop loss: 1.35 Take profit 1: 1.75 Take profit 2: 1.90

>> Read more Technical reports

HK Reports – Read up on our Hong Kong reports here

Webinar Of The Week

Weekly Market Outlook: Yoma, Koda ltd, BRC Asia, Netlink NBN Trust, Phillip on the ground, SG Weekly

Date: 02 Sept 2021

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Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information





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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.  

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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