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.
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.
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.
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
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
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
Updates summarised in 3 minutes
Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
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