DAILY MORNING NOTE | 20 June 2023

Trade of the Day

Sheng Siong Group Ltd (SGX: OV8)

Analyst: Zane Aw

(Current Price: S$1.66) – TECHNICAL BUY
Buy price: S$1.63 Stop loss: S$1.59
Take profit 1: S$1.71 Take profit 2: S$1.80

Singapore stocks ended 0.6 per cent lower on Monday (Jun 19), as investors traded with caution amid an uncertain economic outlook. Singapore Airlines (SIA) was the top-traded counter by value, losing 1.3 per cent or S$0.10 to close at S$7.67. The trio of local banks ended lower on Monday. DBS fell 0.2 per cent or S$0.07 to S$31.11, OCBC lost 0.5 per cent or S$0.06 to close at S$12.59, and UOB ended 0.5 per cent or S$0.14 lower at S$27.82.

Financial markets in the U.S. were closed on Monday in observance of Juneteenth National Independence Day.

SG

Ground handler and in-flight caterer Sats has appointed Henry Low Eng Kiat as its chief operating officer (COO), with effect from Jul 1. Low’s responsibilities as COO will cover technology, data and analytics, operational excellence, safety and risk management, as well as integration management, Sats said in a regulatory filing on Monday (Jun 19). The 48-year-old is currently the global head for special projects at Sats.

OCBC has upped its stake in insurance subsidiary Great Eastern Holdings to 88.4 per cent from 87.9 per cent, the bank announced in a regulatory filing on Monday (Jun 19). The purchase, OCBC stated, was on “a willing buyer willing seller basis” of about 2.3 million shares at S$16.99 each in cash or S$39.9 million in total, without specifying the date of the transaction.

Sanli Environmental has proposed to acquire 22 Chin Bee Drive, one of the properties of ESR-LOGOS REIT (E-LOG) for $13.8 million. The company’s wholly-owned subsidiary, entered into a sale and purchase agreement (SPA) with Perpetual (Asia), in its capacity as trustee of ESR-LOGOS REIT (E-LOG REIT) on June 19 in respect of the purchase. The property is held by E-LOG on a 30-year lease granted by Jurong Town Corporation (JTC) as the head lessor commencing from Sept 16, 2005. The lease will expire on Sept 15, 2035. The property is a four-storey single-user warehouse building with a six-storey ancillary office and a five-storey annexe building with a workers’ dormitory. It has a net lettable area (NLA) of 11,209 sqm (120,652.672 sq ft).

IREIT Global is seeking to raise gross proceeds of around $75.9 million via a preferential offering. The proceeds will be used to mainly fund the acquisition of the 17 retail properties located across France. IREIT announced the acquisition of the properties on June 1. The acquisition will cost the REIT a total of EUR90.9 million ($133.1 million) including fees and taxes. Through its preferential offering, the REIT will offer up to 186.10 million units to its existing unitholders at a preferential offering ratio of 161 preferential offering units for every 1,000 existing units. The preferential offering units will be offered at an issue price of 40.8 cents apiece, representing a discount of 9.6% to the volume weighted average price (VWAP) of 45.15 cents per unit on June 19.

Restaurant operator No Signboard Holdings has received a letter and notice of requisition from its controlling shareholder, GuGong, for an extraordinary general meeting to be held “as soon as practicable” to remove at least five of its directors and appoint new ones in their places. On Monday (Jun 19), No Signboard said GuGong sought to annul earlier resolutions – including a proposed share consolidation and a transfer of controlling interest – passed at the company’s annual general meeting (AGM) on Nov 30, 2022.

US

JD.com aims to create seven listed firms with market values of at least US$14 billion apiece, outlining aggressive targets spanning two decades as it wrapped its signature 2023 sales gala with another record haul. Sales volume during its “6.18” June online bargains event, which concluded on Sunday (Jun 18), reached an all-time high, the company said in a WeChat post on Monday. The summer online sales event, in which larger rival Alibaba Group Holding also takes part, is an important barometer of Chinese consumer spending that’s often compared with Black Friday and the Alibaba-created No 11 event.

Billionaire investor Warren Buffett’s Berkshire Hathaway said it added to stakes in Japan’s five biggest trading houses to beyond 8 per cent on Monday (Jun 19), a move likely to highlight and add to the momentum driving Japan’s stock market to new heights. Berkshire announced stakes in Itochu, Marubeni, Mitsubishi Corp, Mitsui & Co and Sumitomo in 2020 and adding in line with plans to hold the stakes long term and increase them as far as 9.9 per cent.

Intel will invest more than 30 billion euros ($33 billion) in Germany as part of its expansion push in Europe, the U.S. company said on Monday, marking the biggest investment by a foreign company in Europe’s top economy. The deal to build two leading-edge semiconductor facilities in the eastern city of Magdeburg involves 10 billion euros in German subsidies, a person familiar with the matter said.

The Japanese operator of McDonald’s restaurants said on Monday (Jun 19) it would raise prices at 184 city centre branches, equivalent to about 6 per cent of its 3,000 stores, to help absorb higher rents and labour costs. Until now, 40 stores in some city centres and special locations such as airports and motorway service stations had been subject to “city centre pricing”. McDonald’s Holdings Company Japan said the new pricing would start on Jul 19. McDonald’s said the latest round of hikes would range from 10 to 90 yen per item or set. The delivery price of a Big Mac would rise to 590 yen (S$5.57) from 540 yen, it said in a press release.

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

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