Daily Morning Note – 21 May 2021

PHILLIP SUMMARY

The Dow Jones Industrial Average rose 180.97 points, to 34,077.01, and the S&P 500 gained 43.14 points. Wall Street’s main indexes regained their footing on Thursday (May 20) after a three-day slide, buoyed by gains in technology stocks as the smallest weekly jobless claims since the start of a pandemic-driven recession lifted the mood..

Btcoin clawed back some lost ground to trade near $40,000 a day after a brutal selloff, helping renew appetite for risk. The U.S. has proposed that countries agree to a 15% global minimum corporate tax in international negotiations aimed at ending competition to lure companies through cheap rates. The offer, which came in talks held this week, moves the U.S. position closer to the 12.5% rate that had been discussed at the OECD. Lower-tax countries such as Ireland had been skeptical of the U.S.’s proposed 21% rate, and U.K. officials also worry that the rate is too high for the long term.

Asian stocks look set to climb Friday after technology companies led a Wall Street rebound on economic optimism and easing concern about a scale back of U.S. stimulus. Futures were in the green in Japan, Australia and Hong Kong. Treasury yields and the dollar fell. Gold is around the highest price in more than four months. Oil prices dropped to the lowest in nearly a month as traders assessed the likelihood of a renewed nuclear deal with Iran.

BREAKING NEWS

SG News

Singapore fintechs raised $656m in Q1, up 355%. From 2016, funding grew at an annual rate of 47 per cent to about S$1.4 billion in 2020. Fintech companies based in Singapore raised about S$656 million in the first quarter of 2021, up 355 per cent from the year before. A report released by the Boston Consulting Group says that the sum raised in the first three months of the year already amounts to about 46 per cent of the total funding raised in 2020.

OTS Holdings, a brand builder and food manufacturing group in Singapore, plans to list on the Catalist board of the Singapore Exchange (SGX). The company, which has a strong niche in ready-to-eat and ready-to-cook meat products, has filed its preliminary prospectus with the Monetary Authority of Singapore (MAS) on May 20. Its flagship heritage brand Golden Bridge and Kelly’s have become established household names in its key markets of Singapore and Malaysia.

Shares of iFast Corp rose as much as 6.2 per cent on Thursday. This comes days after Bloomberg News reported that the counter was Singapore’s best-performing stock over the past year, and that it would pursue more gains in China, which looks to be its fastest-growing market. The investment products distribution platform’s shares have soared 552 per cent in the last 12 months, a performance that beat all members of the FTSE ST All-Share Index, according to Bloomberg. As at 10.26am on Thursday, the counter had surged S$0.43 or 6.2 per cent to S$7.42, with about 1.6 million shares changing hands. The share price later eased to S$7.33 around 11.24am before pausing at S$7.38, up S$0.39 or 5.6 per cent, by the midday trading break.

Shares of Catalist-listed No Signboard Holdings were up 12.7 per cent on Thursday after the company announced a new controlling shareholder. The counter hit an intraday high of 7.4 Singapore cents as at 9.06am on Thursday, up 17.5 per cent or 1.1 cents. As at 11.26am, it was trading 12.7 per cent or 0.8 cent higher at 7.1 cents, with 21.6 million shares changing hands. No Signboard said in a bourse filing after midnight that Gugong, a controlling shareholder which owns a 74.91 per cent stake in the company, entered into a sale and purchase agreement with Su Hai Jin for a 20 per cent stake in the restaurant operator. No Signboard said the purchaser is a businessman with business interest in Singapore, and is not related to Gugong, the company or any substantial shareholders. No further details on the buyer were given.

Kofu Group is expecting both revenue and operating profits for FY2021 to be hit by the latest one-month ban on dining-in, and said it will not recover to pre-Covid levels. This comes as the Covid-19 situation continues to evolve amid uncertainty about whether further tightening measures – including another circuit breaker – will be imposed, it said in a business update. The full extent of the financial impact on the group for FY 2021 is thus difficult to ascertain at present, it said. The food court-operator said the group’s total revenue on a same-stores basis, excluding new outlets, fell by 10 per cent for the Jan 1 to April 30 period, from the corresponding period in 2019, pre-Covid.

US News

U.S. proposes global minimum corporate tax rate of 15%, with an eye on something even higher. Corporations around the world should pay at least a 15% tax on their earnings, the Treasury Department said Thursday as part of its push for a global minimum for businesses. The final rate could go even higher than that, according to a Treasury release that said the 15% minimum is a “floor and that discussions should continue to be ambitious and push that rate higher.” U.S-based companies currently pay a 21% rate, a level that was slashed during the Trump administration. Previously, the top rate had been 35%. Under a proposal from President Joe Biden, the tax rate would be lifted to 28%, part of a plan to raise levies on both companies and the highest earners.

Tesla plans to deliver Model S Plaid in June after months of delays. Elon Musk said in a tweet on Thursday that Tesla will hold a “delivery event” at the company’s Fremont, California, factory on June 3 for the long-delayed Model S Plaid. Specifically, he wrote: “Tesla Model S Plaid delivery event June 3 at our California factory. Fastest production car ever 0 to 60mph in under 2 secs.” The Model S Plaid is an updated version of the company’s flagship battery electric sedan, which has been in production since 2012.

WeWork reports quarterly loss of nearly $2.1 billion ahead of public listing. SoftBank-backed office-sharing startup WeWork on Thursday reported a first-quarter net loss of $2.06 billion, as it was hit by restructuring charges while it prepares to go public through a merger with a blank-check firm. WeWork said its business was recovering as more people returned to offices due to easing of COVID-19 curbs, after work-from-home arrangements last year weighed heavily on the company by reducing occupancy and increasing operating costs. Total occupancy ticked up to 50% in the first quarter compared to 47% in the fourth quarter, the company said. WeWork in March agreed to go public through a merger with BowX Acquisition Corp, a special purpose acquisition company, in a deal that valued it at $9 billion. SoftBank Group Corp said it would retain a majority stake in the company after the merger. The company, whose attempt at an initial public offering in 2019 spectacularly imploded due to investor concerns over its business model and co-founder Adam Neumann’s management style, said first-quarter revenue nearly halved to $598 million from a year ago. WeWork said it had 490,000 members in the first quarter, compared to 693,000 in March 2020.

U.S. Treasury calls for stricter cryptocurrency compliance with IRS, says they pose tax evasion risk. The Treasury Department on Thursday announced that it is taking steps to crack down on cryptocurrency markets and transactions, and said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service. Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury Department said in a release. A growing number of Wall Street analysts have over the past month sounded the alarm that regulators at the Treasury and the Securities and Exchange Commission could soon take a more active role in cryptocurrency regulation.

US jobless claims fall again as some states end federal aid. Fewer Americans sought unemployment benefits last week — the latest encouraging sign for the rebounding U.S. economy — just as Republican-led states are moving to cut off a federal benefit for the jobless. Twenty-two states, from Texas and Georgia to Ohio and Iowa, plan to begin blocking a $300-a-week federal payment for the unemployed starting in June, according to an Associated Press analysis. All have Republican governors and legislatures. Recipients have been able to receive the $300 federal benefit on top of their regular state unemployment aid. The payment, which lasts nationwide until Sept. 6, was included in President Joe Biden’s $1.9 trillion financial rescue package. The states that plan to cut off the federal benefit represent nearly every one that is controlled fully by Republicans. Florida is considering ending the supplemental payment. And Nebraska, which officially has a nonpartisan legislature, has said it will maintain the payments while it evaluates all pandemic-related jobless benefits.

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

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