Daily Morning Note – 20 April 2020
PHILLIP SUMMARY
Stocks surged on Friday after a report said a Gilead Sciences drug showed some effectiveness in treating the coronavirus, giving investors some hope there could be a treatment solution that helps the country reopen faster from the widespread shutdowns that have plunged the economy into a recession.
The Dow Jones Industrial Average rallied 704.81 points, or 3%, to 24,242.49. It was the Dow’s first close above 24,000 since March 10. The S&P 500 closed 2.7% higher, at 2,874.56 while the Nasdaq Composite advanced 1.4% to 8,650.14.
BREAKING NEWS
CATALIST-listed tourism player Memories Group has discovered a case of fraud at its wholly-owned Myanmar subsidiary, Asia Holidays Travels & Tours Company (AHTT), it said last Wednesday. A sum of about US$500,000 was misappropriated from AHTT’s accounts by three employees involved in its business and investigations are ongoing, it said.
STRUCTURAL steel fabricator TTJ Holdings said on Sunday that six foreign workers employed by its unit TTJ Design and Engineering have been identified as confirmed cases of the Covid-19 infection. TTJ Design and Engineering, at 57 Pioneer Road, was named as a new infection cluster on Saturday.
AEM Holding expects strong earnings despite Covid-19 disruptions. While the Covid-19 pandemic has shuttered the doors of many businesses, AEM Holdings is bucking the trend with a positive outlook. The firm had said it is “cautiously confident” that its sales for the first half of 2020 will be at an all-time high.
VIVIDTHREE Holdings has secured exclusive rights to produce virtual reality (VR) shows based on the sequel to hit movie Train to Busan, the visual effects studio said on Monday.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
RESEARCH REPORTS
Corporate Bond Ideas: Relative value search (Credit Commentary)
Credit Analyst: Timothy Ang
– We scan the local corporate bond universe on a relative value basis to discover bonds trading relatively cheap
– We name the bonds trading at interesting yields
Singapore REITs Sector – Some breathing room for REITs (+ Credit Commentary)
Recommendation: OVERWEIGHT (Maintained), Analysts: Natalie Ong, Timothy Ang
– Extension of timeline for REITS to distribute at least 90% of earnings from 3 to 12 months
– Gearing limit raised from 45% to 50%; 2.5x ICR prerequisite for higher gearing of 50% deferred until 1 January 2022
– Share issue limit for shares and convertible securities raised to 100% of share capital (prev. 50%)
– Leverage limits and enhanced share issue limit in this low interest rate environment is presenting attractive conditions for REITs to acquire. Possible re-rating if REITs choose to tap leverage headroom
RESEARCH VIDEOS
Webinar Of The Week
Market Outlook: (PSR) SIA Capital Raising Exercise (Bonds), Banking Monthly, REITS Monthly, China Monthly, Technicals & Singapore 2Q20 Equity Strategy
Date: 13 April 2020
Phillip Research in 3 minutes: #19 – Singapore Banking Sector Update
For more videos on Phillip in 3 Mins
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