Daily Morning Note – 20 February 2019
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YOUR PHILLIP SUMMARY
The U.S. is asking China to keep the value of the yuan stable as part of trade negotiations between the world’s two largest economies, a move aimed at neutralizing any effort by Beijing to devalue its currency to counter American tariffs, people familiar with the ongoing talks said. Officials from the two countries are discussing how to address currency policy in a “Memorandum of Understanding” that would form the basis of a deal that ultimately will have to be approved by President Donald Trump and his Chinese counterpart Xi Jinping, according to several people involved in and briefed on the discussions. While the precise wording remains unresolved, a pledge of yuan stability has been discussed in multiple rounds of talks in recent months and both sides have tentatively agreed it will be part of the framework of any final deal. Negotiations resume Tuesday in Washington and are scheduled to continue through Friday as a March 1 deadline for higher U.S. tariffs approaches.
Asian shares look set for gains after U.S. stocks rose in thin trading. Walmart Inc.’s stellar earnings boosted consumer shares Tuesday, while Treasuries advanced as investors assessed the prospects for a trade deal with China. The S&P 500 gained for the sixth time in seven sessions, pushing to the highest since early December. Walmart’s best holiday quarter in a decade lifted retailers, and homebuilders got a boost from a positive sentiment report. The 10-year Treasury yield slid below 2.64 percent as concerns remain that the trade truce will end March 1 without a deal, leading to fresh tariffs. The dollar fell against major currencies ahead of speeches from Federal Reserve officials this week and the release of meeting minutes Wednesday that should shed more light on the central bank’s turn to a more dovish tone. China’s yuan traded offshore strengthened against the greenback.
BREAKING NEWS
Senator Bernie Sanders launched a second bid for the White House on Tuesday, joining an already crowded field of candidates vying for the Democratic nomination to run against Trump in 2020.
Germany is not ready to exclude Huawei from its 5G network and may amend its laws so that potentially untrustworthy manufacturers can still provide equipment, its interior ministry told CNBC Tuesday.
Despite tweeting about bitcoin, Tesla founder Elon Musk says his electric car company is steering clear of cryptocurrencies.
CapitaLand Limited achieved a total PATMI of S$1,762.5 million in FY2018, 12.3% higher than PATMI for FY 2017 of S$1,569.6 million. It proposed a dividend of 12 cents per share for FY2018.
The Real Estate Developers’ Association of Singapore’s (REDAS) new president Chia Ngiang Hong, who is also the group general manager of City Developments Limited, on Tuesday suggested ways property curbs on the private housing market could be more targeted, and called for more dialogue between the government and stakeholders in policymaking.
8M Real Estate is buying about S$144 million in shophouses in four transactions involving 10 shophouses in Tanjong Pagar Road, Amoy Street, Gemmill Lane and Lorong Mambong.
DBS BANK is revamping its retail stock-brokerage operations and exploring alternative models to its current broking arm.
DBS Vickers – with a view to providing customers with more holistic services.
The offeror for shares of Singapore-listed Courts Asia, Nojima Asia Pacific, on Tuesday said that it does not intend to revise its offer price of S$0.205 in cash per share for the furniture retailer.
Boustead Projects on Tuesday said that its wholly-owned subsidiary, Boustead Projects E&C, has won a contract worth over S$70 million to design and build an integrated advanced high-tech manufacturing facility in Singapore.
Air-conditioning company Natural Cool Holdings is moving into the food and beverage business through a deal to acquire two snack manufacturing businesses for S$980,000 in cash via a new 80 per cent subsidiary.
SOYOUNG, a Chinese cosmetic surgery website backed by Tencent Holdings Ltd, has filed confidentially for a US initial public offering, according to people with knowledge of the matter.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
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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