Stocks may stabilize in Asia on Tuesday with US equity futures pointing higher and a gauge of the dollar retreating. Futures for Japan, Australia and Hong Kong all rose, signaling better sentiment after the worst weekly drop in global shares since March 2020. Investors are continuing to keep a close eye on China’s Covid flareups and its efforts to shore up economic growth. The yen remains around a 24-year low against the dollar, while Bitcoin held above $20,000.

Asia’s red-hot food prices will likely heat up further in the coming months, with Singapore, South Korea and the Philippines set to see the sharpest price increases, according to Nomura. Singapore is expected to see food inflation double to 8.2% in the second half from 4.1% now, while India will likely see the highest print at 9.1% due to rising feedstock costs, based on Nomura estimates. Inflation is already spreading beyond cereals and edible oils to other categories like meat, processed food and even dining out. Rice, a staple for 3 billion people, has so far been kept stable by ample stocks. But it may be next if demand surges as nations seek alternatives to expensive wheat.


Top gainers & losers



Keppel DC Reit has entered into conditional transactions to acquire 2 data centres in Guangdong, China, for a total price of about 1.6 billion yuan (S$338.3 million), the company said in a bourse filing on Monday (Jun 20). These acquisitions are expected to be accretive to the Reit’s distribution per unit. They will also bump up the Reit’s portfolio occupancy rate to 98.9 per cent from 98.7 per cent as at end-March, and raise its weighted average lease expiry to 8.8 years from 7.7 years. Keppel DC Reit will acquire these 2 facilities located at Bluesea Intelligence Valley Data Centre at Shaping Street in China from Guangdong Bluesea Data Development Co and its parent company, Guangdong Bluesea Mobile Development Co. The properties will be leased to Bluesea on a triple net basis for 15 years.

Nearly 2 in 3 S-Reits are faring worse than at IPO, but total returns mostly positive. Real estate investment trusts (Reits) have been a favoured asset class for investors here seeking stability and yield. But ahead of the 20th anniversary of S-Reits coming up in July, nearly two-thirds of the 41 actively traded S-Reits and property trusts have sunk below their initial public offering (IPO) prices after adjusting for corporate actions.Notably, all but 4 of the 22 S-Reits that listed on the Singapore Exchange (SGX) over the past decade since 2012 are below where they started, according to data compiled by The Business Times.. Investors can take comfort from the fact that only 8 of the 41 actively traded S-Reits have failed to deliver positive total returns since listing. The other 3 S-Reits that have generated negative total returns since their listings are Lippo Malls Indonesia Retail Trust, BHG Retail Reit and Dasin Retail Trust. Interestingly, all 8 of these underperforming S-Reits are focused on overseas assets outside of Singapore.En bloc hopeful Chuan Park gets offer of S$860m, lower than reserve price. Based on the EOI offer price of S$860 million, owners of residential units could stand to receive sales proceeds ranging from S$1.11 million to about S$2.45 million. Owners of a 474 square foot (sq ft) commercial unit and a 1,238 sq ft commercial unit could receive about S$1.05 million and S$1.94 million respectively.

Australia-listed real estate group Lendlease announced on Monday (Jun 20) that it will be entering into a partnership agreement with PGGM, a pension fund manager based in the Netherlands, with an investment of S$1 billion. The new collaboration, coined Lendlease Innovation Limited Partnership, will see PGGM holding an 85 per cent interest, while Lendlease holds the other 15 per cent. The funds invested into the partnership will be used for investments in “real estate assets in the innovation and life science space” specifically in Australia, Japan and Singapore, said Lendlease in its press release. Lendlease said that it will be providing services to the partnership based on the assets’ needs, including investment management and development management. At the time of its announcement, Lendlease said it had already secured its first asset in Yokohama, Japan. The 12-storey freehold property, listed for commercial use, is located close to “clusters of high-tech, knowledge-intensive R&D (research and development) and innovation operations in Yokohama’s Minato Mirai district”, said Lendlease.

Sembmarine doubles down on merger narrative after minority shareholder revolt. This comes ahead of a Jun 20 virtual dialogue session organised by the Securities Investors Association (Singapore) which is slated to be held at 5 pm, and after a minority shareholder known as Philip Loh launched an online campaign against the proposed deal.


US house prices are likely to fall as mortgage rates exceeding 6 per cent crimp affordability for the average buyer, according to Capital Economics. Property prices could contract an annual 5 per cent by the middle of next year, Matthew Pointon, senior property economist, said in a research note on Monday (Jun 20). He’d previously projected no change in values by that time. An average household looking to buy a home for the median price will now have to put more than a quarter of their annual income toward mortgage payments, according to the report. That surpasses the average 24 per cent seen in the mid-2000s. “That deterioration in affordability will shut many potential buyers out of the market,” Pointon wrote. “That will reduce the competition for homes, and sellers will eventually see the need to accept a lower price for their property.”

American chipmaker Intel has filed a claim for 593 million euros (US$624 million) in interest from the European Commission, 5 months after it convinced Europe’s second-top court to scrap a 1.06-billion-euro EU antitrust fine, an EU filing showed on Monday (Jun 20). Europe’s top court paved the way for such damage demands last year in a landmark ruling which ordered the EU executive to pay default interest on reimbursed fines in annulled antitrust cases. Intel in its application to the Luxembourg-based General Court said the Commission, which acts as the competition watchdog in the 27-country European Union, had refused to reimburse the company the default interest. The Commission returned US$1.2 billion to Intel after its court defeat in January this year.

Nearly 1 in 4 European companies in China are considering moving their investments out of the country as the ongoing Covid outbreaks and lockdowns dim the outlook for the world’s second-largest economy, a survey showed. Some 23 per cent of the businesses that responded to the survey are thinking of moving their current or planned investments away from China, said the report released Monday (Jun 20) by the European Union Chamber of Commerce in China. The survey was conducted at the end of April, when Shanghai was still in shutdown and restrictions in places like Jilin disrupted business activity. The number of European firms reassessing their options in China was the highest proportion in a decade in the survey, and also more than double the 11 per cent recorded in a February poll, said the chamber. Some 372 businesses responded to the April poll, whereas 620 responded to the February one.

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


HRnetGroup Limited – Resilient demand, buy-backs and more regional expansion
Recommendation: BUY (Maintained); TP S$1.18, Last close: S$0.765; Analyst Paul Chew
– Demand for jobs remains robust in Singapore with record job vacancies.
– The franchise is expanding further regionally with new co-owners in Indonesia, Shenzhen, Hong Kong and Shanghai. HRnet announced on 13 June 22 that it is undertaking a S$30mn share buyback, equivalent to almost six months average daily volume.
– While the barrier to entry in the recruitment industry may be low, we believe the barriers to scale are immense. HRnet possesses a network of more than 700 recruiters across 14 Asian cities. These barriers allow HRnet to maintain an asset-light model with minimal fixed assets of S$1.5mn. The reported return on equity is 16% but arguably much higher. Total attributable equity is S$370mn, almost equivalent to the net cash of S$327mn. In other words, HRnet could return a large chunk of capital to shareholders and still sustain profitability, especially with S$114mn working capital already tied as trade debtors.
– We maintain our BUY recommendation with an unchanged target price of S$1.18. Our valuation is benchmarked to the mid-range of the historical 5-year range, 12x PE FY22e ex-cash. HRnet dividend yield is 5% based on their guided payout of 50% of a recurrent net profit.

Upcoming Webinars

Guest Presentation by Uni-Asia Group Limited

Date: 22 June 2022

Time: 12pm – 1pm

Register: https://bit.ly/3aJjIhD

POEMS Podcast:

Research Videos

Weekly Market Outlook: Singapore REITs Monthly, FOMC Meeting Highlights and SGWeekly
Date: 20 June 2022
Click here for more on Market Outlook.
Sign up for our webinars here, and be among the first to receive economy and market updates.


Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
Click here for more on Phillip in 3 mins.

Follow our Socials

Facebook Social Icon Instagram Icon Twitter Social Icon Youtube Social Icon Linkedin Social Icon TikTok Social Icon Spotify Social Icon

Join our Singapore Equity Research Community on POEMS Mobile 3 App for the latest research reports, market updates, insights and more

Click to join!


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 揳s 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