Daily Morning Note – 21 Sep 2020

PHILLIP SUMMARY

U.S. stock futures dipped on Sunday night as the market tried to bounce back from its longest weekly losing streak in about a year. Dow Jones Industrial Average futures were down by 56 points, or 0.2%. S&P 500 futures slipped 0.2% and Nasdaq 100 futures traded 0.1% lower. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite all fell for a third straight week. That marks the market’s longest weekly slide since 2019.

Those declines came as tech shares — which led the broader market off its coronavirus lows and into record territory — struggled. Facebook, Amazon, Apple, Netflix, Google-parent Alphabet and Microsoft all posted steep weekly losses. The S&P 500 tech sector pulled back by 1%. Tech was under pressure last week in part because of valuation concerns within the space as well as options of individual stocks, ETFs and indexes expired.

BREAKING NEWS

Democratic donors smashed fundraising records after the death on Friday of US Supreme Court Justice Ruth Bader Ginsburg, funneling more than US$90 million to candidates and progressive groups in just over 24 hours.

Democratic presidential candidate Joe Biden urged Senate Republicans not to vote on any candidate nominated to the Supreme Court as the November election approaches, calling his rival Donald Trump’s plan an “exercise of raw political power.”

Several global banks moved large sums of allegedly illicit funds over a period of nearly two decades, despite red flags about the origins of the money, BuzzFeed and other media reported on Sunday, citing confidential documents submitted by banks to the US government.

UBS Group has experimented with virtual reality headsets for its bankers to simulate the trading floor experience at home, the Financial Times reported. The investment bank has tried Microsoft’s HoloLenses with its London traders, the newspaper said.

Singapore Exchange (SGX) on Sunday night said that it will not be acceding to watch-listed construction firm Swee Hong’s delisting appeal as well as its request for an extension of six months for the company to submit its resumption proposal. As a result, Swee Hong will have to delist by Sept 23, 2020.

FIRST Reit’s manager said on Sunday that it has a received a non-binding proposal regarding a proposed rental restructuring from former parent company PT Lippo Kawaraci Tbk.

Raffles Education said in a bourse filing on Saturday that the requisition notice by substantial shareholder Oei Hong Leong, Oei Hong Leong Art Museum Limited and Indian edtech businessman Shantanu Prakash to hold an extraordinary general meeting (EGM) is without merit.

US President Donald Trump said on Saturday he supported a deal in principle that would allow TikTok to continue to operate in the United States, even as it appeared to conflict with his earlier order for China’s ByteDance to divest the video app.

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

TECHNICAL REPORTS

SATS Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical SELL

SATS Ltd (SGX: S58) bearish downside has acted according to our analysis dated on 26th August. Recent technical also add on to the probability of further strong downside.

Alibaba Group Holdings Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Alibaba Group (US: BABA) on our report dated 1st September, we were positive that wave 5 would go beyond US$300.00 and terminate near US$305.67. However, prices reverse sharply near 200.00% extension level and rebounded at US$268.00 according to our strategy plan B. Based on the wave analysis, we believe that Alibaba will have further correction to the downside.

Apple Inc

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Apple Inc (US: APPL) primary phase 5-wave impulse has complete after the stock forms a divergence, signalling an end of a 5-wave trend on 2nd September 2020. Based on the technical and wave analysis, we are looking at further downside.

>> Read more technical reports

RESEARCH REPORTS

First Sponsor Group Limited – Your financier, developer and landlord

Recommendation: BUY (Initiation), Last Done: S$1.25

Target Price: S$1.65, Analyst: Tan Jie Hui

– Unrecognised property development revenue of S$586mn with another S$1.95bn worth of gross development value (GDV) for unlocking, equivalent to 5-6 years of sales.

– Property financing loan book grew at 19% CAGR in the past 5 years. Securitised loans offer recurring income with returns of low-mid teens. We are estimating loan book growth of around 8% for FY20e and FY21e.

– Initiate coverage with BUY and target price of S$1.65.

SG Bonds Weekly – Week 39

Credit Analyst: Timothy Ang

– Asia new issue pipeline remains increasingly active with 5 new mandates outstanding from the ones announced in the last two weeks.

– Fed Chair Jerome Powell will appear alongside Treasury Secretary Steven Mnuchin before the Senate Banking Committee to give their quarterly CARES Act report to Congress on Thursday.

Phillip Model Bond Portfolio – Review

Credit Analyst: Timothy Ang

– The Phillip Model Bond Portfolio total return outperformed the benchmark Thomson Reuters/iEdge SFI Corporate Index by 0.05% for the month.

– Given the potential risk of bear steepening as inflation expectations rise, we take comfort that the portfolio is relatively short dated with bonds maturing/calling within 2 to 6 years.

– We maintain the holdings in the portfolio for the month.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: (PSR) Sembcorp Industries (Initiation), SG REIT Monthly, Asia Technical Outlook, SG Weekly

Date: 14 September 2020

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #25 – Prime US REIT; Initiation

For more videos on Phillip in 3 Mins

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





Disclaimer
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.