Daily Morning Note – 20 March 2019
WEEKLY MARKET OUTLOOK WEBINAR
Register HERE for MONDAY’s 11.15am webinar.
Archived webinars available.
YOUR PHILLIP SUMMARY
U.S. stocks closed mostly lower Tuesday, with the Dow Jones Industrial Average snapping a four-day winning streak, as gains in consumer discretionary stocks and expectations for the Federal Reserve to continue its pledge to keep rate hikes on hold were offset by conflicting reports on U.S.-China trade talks.
Asian stocks traded mixed early Wednesday as investors held back from making big changes prior to the Federal Reserve’s policy decision. Treasuries and the dollar steadied.
Shares in Japan, South Korea and Australia edged lower. A rally in U.S. stocks earlier sputtered out after a report that U.S. and Chinese negotiators remain at odds on aspects of their current trade talks soured sentiment. A rally in oil stalled.
RESEARCH REPORT
Singapore REITs Monthly – March 2019
Analyst: Tara Wong; Recommendation: Neutral (maintained)
– FTSE S-REIT total return gained 1.5% MTD and 10.4% YTD. Strongest gains were from the
Commercial sector (+12.3% YTD) and weakest showing at the Retail sector (+7.8% YTD).
– Sector yield spread dipped further below the -1 standard deviation (s.d.) level as at end-
February to 261bps over the benchmark 10-year SGS (10YSGS) yield.
– 3m SOR continued to rise YTD, ending at 1.95% in February.
– Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Office and Hospitality.
Singapore Exchange Limited – Derivatives growth the slowest in almost two years
Recommendation: ACCUMULATE (Downgrade), Last Close Price: S$7.31
Target Price: S$8.17 (previous TP: S$8.36), Analyst: Tin Min Ying
– HKEX announced the launch of futures contracts on MSCI China A Index.
– SGX’s February Derivatives Daily Average Volume (DDAV) growth was flat at 1.4% YoY,
the lowest in almost two years.
– SGX’s derivatives business accounts for c.49% of total revenue in 6M19.
– We downgrade to Accumulate at a lower TP of S$8.17 (previously S$8.36) as lowered
our FY19e earnings by 2%. We peg our TP to 23.2x P/E, at SGX’s 5-year mean.
BREAKING NEWS
Property developer Oxley Holdings has terminated a letter of intent (LOI) to sell its Mercure and Novotel Hotels to Gracious Land Pte Ltd with immediate effect, as a subsequent deposit of S$38 million was not made by the buyer. In a regulatory filing late on Tuesday night, Oxley said that among other things, the subsequent deposit, being 4 per cent of the total consideration, was not made by Gracious Land.
A SUBSIDIARY of CapitaLand Limited, CapitaLand (China) Investment Co Ltd, has divested its 100 per cent interest in Beijing CapitaLand Property Management Co (BCPM) for 20.8 million yuan (S$4.2 million), CapitaLand said in a Singapore Exchange filing on Tuesday. BCPM, whose main properties in Beijing are the clubhouse for the Orchid Garden residential development and 137 carpark lots in the La Foret residential development, was sold to a party unrelated to CapitaLand.
Yuuzoo Networks Group Corp said that it has secured commitment for a three-year, S$30 million funding facility from “Swiss-based” Asia Financial Group (AFG). According to the Tuesday announcement, YuuZoo may draw down up to S$30 million over three years by issuing YuuZoo shares to AFG at a 7.5 per cent discount to the closing price of YuuZoo stock on the drawdown date.
UOB’s wholly owned subsidiary UOB Bullion and Futures has entered into an agreement with financial services firm INTL FCStone to sell its futures and options, brokerage and clearing business for US$5 million, with a view to winding down the business following a review. In statements issued on Tuesday separately to the Singapore Exchange and to the media, UOB and INTL FCStone said respectively that the asset purchase agreement through the latter’s Singapore subsidiary hinges on the Monetary Authority of Singapore giving the green light.
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
| Disclaimer |
| The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials. |
| Confidentiality Note |
| This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation. |
