Daily Morning Note – 20 September 2018


Register HERE for MONDAY’s 11.15am webinar.

Archived webinars available.


On Wednesday, the Dow Jones Industrial Average and S&P 500 rose close to new records, pushed by stock gains in manufacturing and finance companies. This was due to the less stringent than anticipated new tariffs implemented by the US and China.

The yield on 10-year Treasuries continued this week’s march above the much-watched 3 percent mark and on Wednesday reached as high as 3.09 percent, a level unseen since May. Oil climbed above $71 a barrel.

In the Asia-Pacific region, most of the indexes rose. The Shanghai Composite Index and Hong Kong’s Hang Seng each added more than 1%.
It is expected that the Federal Reserve will raise rates again at next week’s meeting.


First REIT – A new dawn

Recommendation: NEUTRAL (Maintained), Last Close Price

Target Price: S$1.31, Analyst: Tara Wong

– OUE Limited and OUE Lippo Healthcare (OUELH) collectively acquiring 100% of
the shares in Bowsprit Capital Corporation Limited (Bowsprit), the Manager of
First REIT (FIRT), from Lippo Karawaci (LPKR).

– OUELH also acquiring 10.63% of FIRT units from Bridgewater International
Limited (Bridgewater) (subsidiary of LPKR).

– OUELH and LPKR will each have 10.63% stake in FIRT upon completion of

– New ROFR pipeline from OUELH – which includes healthcare assets in Japan,
China, Malaysia – in addition to existing ROFR pipeline from LPKR.

– Cash infusion from LPKR’s divestment of stake in Bowsprit and FIRT through
its holding companies, will ease its cash flow status and potentially improve
receivables at FIRT.

– Maintain Neutral with an unchanged TP of S$1.31.

Singapore REITs Monthly – Monthly Tracker: September 2018

Recommendation: NEUTRAL (Maintained), Analyst: Tara Wong

Target Price: S$1.31, Analyst: Tara Wong

– FTSE S-REIT Index declined 2.6% YTD. Weakness across all sub-sectors over
the past month, with Starhill Global REIT being the top performer (+5.1%
MTD) and OUE Commercial REIT being the worst performer (-11.7% MTD).

– Sector yield spread of 296bps over the benchmark 10-year SGS (10YSGS) yield
remains close to the -1 standard deviation (SD) level as at end-August.

– 3m SOR rose to 1.65% as at end-August, near 10-year highs.

– Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Office and


Stocks rose on Wednesday as higher interest rates drove gains in the banking sector. Sentiment on Wall Street was also boosted as investors bet that a trade war between the U.S. and China will not be as bad as previously feared. The Dow Jones Industrial Average closed up 158.80 points with Goldman Sachs as the best-performing stock in the index.

China will not resort to a massive stimulus as it did in 2008 to boost its economy, Prime Minister Li Keqiang said at the World Economic Forum held in Tianjin on Wednesday. Instead, the country had ample tools to offset the downward pressures facing its economy, such as stabilising investment, reducing taxes and fees, instituting a more pro-active fiscal policy and easing credit difficulties for small and medium-sized companies.

Geo Energy Resources Limited announced it is considering seeking a dual primary listing on the Main Board of HKEx. The Potential Listing may or may not involve an offering of new shares in conjunction with the Potential Listing.

Total sales for Sasseur REIT’s first day of its 10th anniversary celebrations exceeded RMB130 million, setting a new national record for outlet mall’s one day sales in China.

QAF Group clarified that the outbreak of African swine fever (“ASF”) in the People’s Republic of China has had no impact on its primary production business, under the Rivalea Group, as the business is located entirely in Australia. Nonetheless, as Australian pork producers are not permitted to export pork to the PRC, the outbreak of ASF in the PRC does not currently give rise to any export opportunity with respect to the PRC.

Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures

Important Information

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.


Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  


Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com