Daily Morning Note – 21 April 2022
U.S. equity futures climbed and Asian stocks look set for a steady start Thursday as investors mull a slide in Treasury yields.
Nasdaq 100 contracts outperformed after the gauge declined, with streaming and media companies dragged down by a more than 30% slump in Netflix Inc. Futures edged higher in Japan and Australia, but declined in Hong Kong. The S&P 500 ended little changed. Tesla Inc. rose in extended trading after earnings beat estimates.
Treasury yields tumbled from this year’s highs. Ten-year yields retreated 10 basis points as investors are starting to see value after the rout. Robust demand for an auction of 20-year bonds added fuel to the rally. A dollar gauge declined.
Stocks to watch: Mapletree Commercial Trust
SG
Mapletree Commercial Trust (MCT) on Wednesday (Apr 20) reported a 3.4 per cent decline in distribution per unit (DPU) to S$0.0514 for the half-year ended Mar 31, down from S$0.0532 a year earlier. Gross revenue was down 1.8 per cent to S$255.8 million for the half-year period, from S$260.3 million the year prior. The Reit’s manager noted that higher Covid-19 one-offs were recorded in H2 FY2021 and the full-year ended Mar 31. These one-offs were for the property tax rebate and government grant under the Job Support Scheme, with the 15 per cent property tax rebate having been disbursed in advance in FY2020.
Mainboard-listed telco Singtel said on Wednesday (Apr 20) that it has successfully priced its first digital sustainability-linked bond in partnership with UOB and private markets platform ADDX. The US$100 million 5-year digital sustainability-linked bond (SLB) will be drawn down under Singtel Group Treasury’s existing S$10 billion Euro Medium Term Note Programme and is guaranteed by Singtel. The SLB will carry a US dollar fixed coupon rate of 3.56 per cent per annum and mature on Apr 27, 2027. The bond will be issued on Apr 27, 2022 with an effective Singdollar interest rate below 3 per cent per annum post-hedging. UOB is the lead manager for the issuance, while the entire SLB will be tokenised on ADDX’s digital securities exchange.
Mainboard-listed Raffles Education Corporation (REC) on Wednesday (Apr 20) sought to clarify media reports regarding a charge sheet filed against the company over its dispute in India. In a bourse filing, REC noted an article that said the Delhi Police’s Economic Offences Wing (EOW) had filed a charge sheet against its directors and top management, over its dispute with Educomp Group and Jai Radha Raman Education Society. The article had also noted allegedly attempts by an REC unit to grab the education society’s land and buildings in India, as well as a supposed “criminal conspiracy” to defame Educomp Group, through forged evidence and documents.
Yangzijiang Shipbuilding’s proposed spin-off of its investment segment has been “overwhelmingly approved” by shareholders with an approval rate of 100 per cent, announced the group on Wednesday (Apr 20). Yangzijiang Financial Holding (YZJFH) will therefore proceed to list on the Singapore Exchange under the ticker symbol “YF8” at 1 pm on Apr 28. On the same day, YZJFH will be added to the Straits Times Index (STI) with the same investable weight as Yangzijiang Shipbuilding. It will also be added to the FTSE ST Mid Cap Index, FTSE ST China Index and FTSE ST All-Share Index. Yangzijiang Shipbuilding’s distribution date will take place on Apr 27. Its last trading day on a cum-distribution basis is Apr 21, with shares of the group to trade on an ex-entitlement basis the day after.
The way Temasek quantifies climate risk based on an internal carbon price assumption of US$42 per tonne is a generalised technique that comes with “all kinds of problems”, but it is a “small step on a very long journey” the state investor is on to work out a better approach. Temasek’s head of risk management Robert Mainprize made these remarks at a Ecosperity Conversations session held in partnership with the CleanEnviro Summit Singapore 2022 on Wednesday (Apr 20). The session is part of Temasek’s series of year-round, focused dialogues on sustainability megatrends and topics. A report by Tsinghua University’s Center for Green Finance Research, which unpacked existing climate risk analysis practices and examined their limitations, was launched at Wednesday’s session, and Mainprize was discussing it with a panel.
Indonesia has detained suspects including the commissioner of a Wilmar International unit and a senior trade ministry official as part of a corruption case involving palm oil exports. The commissioner of PT Wilmar Nabati Indonesia with initials MPT and the trade ministry’s director-general of foreign trade with initials IWW have been detained after being named suspects in the case along with 2 other people, said Attorney General ST Burhanuddin. The case involves the approval of export permits that didn’t meet requirements and a lack of local palm oil distribution as required by the domestic market obligation (DMO) rule, he added. The DMO policy has since been scrapped.
US
Credit Suisse Group said it expects to post a first-quarter loss due to a 200 million Swiss francs (S$287.3 million) hit to revenues from Russia’s invasion of Ukraine and a previously-indicated increase in legal provisions, according to statement on Wednesday (Apr 20). The Zurich-based lender said its results, due next week, would be negatively affected by its exposure to the war in Ukraine both with respect to counterparty and credit-risks, leading to a 200-million-franc revenue hit. It also said it will see total legal provisions increase by 600 million francs, to a total of 700 million francs for the quarter, related to developments in a number of legal cases more than a decade old.
Oil prices rebounded on Wednesday (Apr 20) as a drop in US oil inventories and concerns over tighter supplies from Russia and Libya drove a recovery from the previous session’s sharp losses. Brent crude futures rose US$1.46, or 1.4 per cent, to US$108.71 a barrel by 1139 GMT. The front-month WTI crude futures contract, which expires on Wednesday, rose US$1.50, or 1.5 per cent, to US$104.06 while the second-month contract gained US$1.52 to US$103.57. The 2 main benchmarks had fallen by 5.2 per cent in volatile trading on Tuesday after the International Monetary Fund (IMF) cut its forecast global growth forecast by nearly a full percentage point, citing the economic impact of Russia’s war in Ukraine and warning that inflation had become a “clear and present danger” for many countries.
Shell’s board told shareholders to reject a Dutch activist group’s resolution that asks the energy company to set more stringent climate goals. It said that adopting the Follow This vote, which wants the company’s policies to be more consistent with the Paris climate accord, “could result in unrealistic interim targets that are harmful” to its own energy transition strategy and good governance. To convince investors that its already doing enough, Shell will put its energy transition progress report to a non-binding vote at the annual shareholder meeting scheduled for May 24.
JPMorgan Chase & Co was removed as the most senior underwriter for Kingsoft Cloud Holdings’ Hong Kong stock offering after one of the bank’s analysts cut the share-price target for the Chinese technology company by half, people familiar with the matter said. The New York-based bank lost the so-called lead-left role in arranging Kingsoft Cloud’s listing, the people said, asking not to be identified. JPMorgan is still a sponsor of the offering, but is now ranked behind UBS Group and China International Capital Corp, the people added. The demotion could cut fees for JPMorgan and underscores the tricky path banks must sometimes navigate when their research departments issue downbeat calls on investment-banking clients. JPMorgan is among a slew of global banks seeking to expand in China at a time when the nation’s stock market is tumbling on worries about slowing growth, strict Covid Zero policies and a government crackdown on tech companies.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
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Date: 18 April 2022
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