Daily Morning Note – 22 April 2019


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While most international markets were closed on Friday, it was business as usual for Japan and China. Despite trading lacking direction and liquidity being low, their markets managed to register gains.

In Japan, the benchmark Nikkei 225 index added 0.5 per cent, or 110.44 points, to 22,200.56, while the broader Topix index climbed 0.12 per cent, or 1.96 points, to 1,616.93.

In China, the benchmark Shanghai Composite Index gained 0.63 per cent, or 20.60 points, to close at 3,270.80, and the Shenzhen Composite Index, which tracks stocks on China’s second exchange, added 0.94 per cent, or 16.52 points, to end the day at 1,778.81.

The US dollar steadied against a basket of currencies on Friday after hitting a 21/2-week high overnight as data pointed to a sturdy US economy, while the euro was dented by weak manufacturing activity in Europe.


CapitaLand Commercial Trust – Fundamentals remain intact

NEUTRAL (downgraded); TP: S$1.93, Last close: S$1.93, Analyst: Tara Wong

– 1Q19 NPI and DPU in line with our estimates. Higher occupancy at AST2
(acquired in 4Q17) continued to support YoY topline improvement.

– Slight dip in portfolio occupancy triggered by a non-renewal at Six Battery

– Outlook positive with expiring rents on the downtrend in 2019-2020.
Macro catalysts from the CBD Incentive Scheme introduced in the URA’s
Draft Master Plan 2019.

– Downgrade to NEUTRAL due on recent positive price movement, with
unchanged TP of S$1.93.

United Overseas Bank Limited – Rising Funding Pressure to Soften NIM

Recommendation: BUY (Maintained), Last Close Price: S$25.58

Target Price: S$32.00 (previous TP: S$32.50), Analyst: Tin Min Ying

– Trailing down of SIBOR in the next quarter to be offset by rising mortgage rate
and lesser competition of funds.

– Loans demand underpinned by property funds in areas such as commercial
properties and data centres.

– Fee income to benefit from wholesale loan product and services fees (i.e.

– Capital market turnaround to aid fee income and wealth management

– Maintain BUY with a lower target price of S$32.00 (previous TP S$32.50) based
on Gordon Growth Model. The decrease in target price was due to our lower
NIM assumption of 1.82% (previously 1.84%).


Following Dyson‘s plans late last year to manufacture its first electric car in Singapore, the city-state is now in talks with other makers of green vehicles to set up shop on the island.

Japan’s Toyota Motor Corp said on Sunday it was setting up a research institute in Beijing in partnership with Tsinghua University to study car technology using hydrogen power and other green technologies that could ease environmental problems in China.

President Donald Trump‘s decision to impose tariffs on imported washing machines has had an odd effect: It raised prices on washing machines, as expected, but also drove up the cost of clothes dryers, which rose by US$92 last year.

SABANA Shari’ah Compliant Industrial Reit’s (Sabana Reit) distribution per unit (DPU) for the first quarter eased to 0.75 Singapore cent per unit from 0.88 cent a year ago.

SATELLITE communications equipment provider Global Invacom Group (GInva) and vendor, Tactilis Pte Limited, have decided to mutually terminate GInva’s proposed acquisition of Tactilis Sdn Bhd.

Financial markets in Australia, Hong Kong and Wellington are closed on Monday for a public holiday.

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

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

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