Daily Morning Note – 21 July 2021

PHILLIP SUMMARY

Asian stocks look set to snap three days of losses after bargain hunters drove U.S. equities to the biggest advance since March as anxiety over the economic impact of coronavirus flareups eased. Treasury yields rose.

Futures climbed Wednesday in Japan, Australia and Hong Kong. The S&P 500 almost erased Monday’s slide in a comeback for the reopening trade led by cyclical sectors such as industrials and financials, while a gauge of small caps jumped 3%. U.S. contracts fluctuated in early Asian trading.

A rally in Treasuries paused, sending 10-year yields back above 1.2%. It remains to be seen if the recovery in yields has legs amid lingering concerns about the delta virus variant that led traders to pare back bets on Federal Reserve rate hike.


BREAKING NEWS

SG News

The distribution per unit (DPU) of Mapletree Logistics Trust (MLT) for the first quarter ended June 30 grew 5.7 per cent to 2.161 Singapore cents amid higher gross revenue during the period. In an exchange filing on Monday, the manager said gross revenue for the first quarter climbed 23.7 per cent year on year to S$163.7 million, driven by higher revenue from existing properties, contributions from accretive acquisitions completed during the previous financial year, and the completed redevelopment of Mapletree Ouluo Logistics Park Phase 2. Net property income for the first quarter rose 21.3 per cent year on year to S$144.2 million.

The sustainable finance market has burgeoned to record levels in the first half of this year, according to a report out on Monday from financial markets data provider Refinitiv. Its Sustainable Finance Review: First Half 2021 found that sustainable finance activity in debt and equity capital markets, as well as mergers and acquisitions (M&A) activity involving sustainable companies, all reached record levels in the first six months of the year. In debt capital markets, sustainable finance bonds totalled US$551.6 billion during the first half of 2021, which is an increase of 76 per cent year-on-year, and also an all-time first half record.

Singapore’s online real estate firm PropertyGuru Pte is nearing a deal to go public through a merger with Bridgetown 2 Holdings, the blank-cheque company backed by billionaires Richard Li and Peter Thiel, according to people with knowledge of the matter. A transaction could value the combined entity at about US$1.8 billion, the people said, asking not to be identified because the matter is private. The deal will also include a private investment in public entity, or PIPE, of about US$100 million to US$150 million, anchored by institutional investors including Australia’s Rea Group, the people said. The parties are hammering out the final details and an announcement could come as early as this week, the people said. Discussions could still face delays or even fall apart, they added. Representatives for PropertyGuru and Bridgetown 2 declined to comment, while a representative for Rea Group didn’t immediately respond to requests for comment.

Nanofilm Technologies said on Monday that it has entered into a definitive agreement with state investment company Temasek to invest in a joint venture (JV), Sydrogen Energy. It follows an earlier announcement in April where the parties had entered into a non-binding term sheet. In the exchange filing on Monday, the company said Sydrogen will leverage Nanofilm’s core technologies to develop new components and solutions to overcome existing limitations in enabling the use of hydrogen as an energy source. It aims for this to bring about greater and more widespread commercial adoption of hydrogen energy.


US News

A new ad for Microsoft Teams unveiled on Tuesday imagines what it might have been like to travel for the 2020 Tokyo Olympics. The ad shows people, who had canceled plans to go to Tokyo this summer because of the pandemic, receive a Teams virtual tour from Tokyo residents. With the ad, Microsoft is trying to drive a different kind of attention to Teams, its video and chat software that competes with Slack, Zoom and other services, even as people begin to return to work in the U.S. Teams saw a major increase in usage while people worked from home during the pandemic. The spot aims to show that everyone, not just businesses, can use the product to connect. The ad, part of a campaign called “Ticket to Tokyo,” will premiere during Friday’s Opening Ceremony broadcast and run in the U.S. The company worked with its agency, Interpublic’s McCann, on the campaign.

Retailers in the U.S. will spend $223 billion more in the second half of 2021 than in the same period in 2020, according to a Salesforce forecast released Tuesday. The amount represents a 62% increase from last year. It’s comprised of an additional $12 billion spent with suppliers, $48 billion more in wage expenses and $163 billion extra in logistics costs. Salesforce VP and GM of Retail Rob Garf said consumers, in turn, should expect higher prices. “Retailers will certainly take on some of the burden and consumers are going to feel it as well, but given the significant increase across the board from manufacturing to logistics to labor, it can’t be all passed on to the consumer,” he told CNBC.

UBS has beaten second-quarter earnings expectations as the wealthy poured money into its flagship wealth management business. The Swiss banking giant on Tuesday reporting net profit attributable to shareholders of $2 billion for the second three months of the year. This marks a rise of 63% from the same period last year, and significantly above analysts expectations of $1.34 billion, according to Refinitiv data. In its earnings report, UBS attributed the success to “favorable market conditions and investor sentiment,” along with “continued momentum in flows and volume growth.”

IBM shares rose as much as 4% in extended trading on Monday after the enterprise technology and services provider reported second-quarter earnings that came in stronger than analysts had expected. Revenue grew 3% year over year in the quarter, according to a statement, the fastest growth in three years, as the company laps a quarter that saw meaningful impact from the coronavirus. In the previous quarter revenue had grown 0.9%. The company reiterated its expectation that revenue will grow, rather than decline, in the full year. “The overall spend environment continues to improve,” CEO Arvind Krishna said on a conference call with analysts. “With the economy reopening in many parts of the world, many markets and industries are getting back on track. We see this in North America and in select industries.”

Bitcoin fell below $30,000 for the first time since Jun. 22 dragging other digital coins lower. About $89 billion was wiped off the entire cryptocurrency market in 24 hours as of 6:29 a.m. ET on Tuesday, according to CoinMarketCap data. Bitcoin was down more than 5% while ether fell over 6% and XRP sank almost 9%, according to CoinDesk data. Bitcoin is up 1.87% for the year. Ether and XRP are both up about 135% for the year. The plunge in bitcoin came after a big sell-off in global stock markets. On Monday, the Dow Jones Industrial Average had its worst day since last October.


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

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