Daily Morning Note – 22 June 2021
Asian stocks Tuesday are set to track a U.S. equity rebound as the prospect of very gradual policy tightening tempers some of the concerns about the Federal Reserve’s hawkish tilt. Treasuries and the dollar retreated.
Futures rose in Japan, Australia and Hong Kong. The S&P 500 rallied the most in five weeks, outperforming the technology-heavy Nasdaq 100, aided by a revival of the value trade in sectors like energy and financials. U.S. equity contracts were steady in early trading.
Yields on longer-dated Treasuries rebounded in the U.S. session Monday, even as short-end rates remained firmly anchored. That undid some of the curve-flattening that swept across markets after Fed officials last week accelerated their expected pace of policy tightening.
Crude oil and gold jumped as a dollar gauge snapped a six-session winning streak. Bitcoin sank after China intensified its cryptocurrency clampdown.
Singapore Myanmar Investco has entered into a subscription agreement with China-based Internet company The9 to raise up to S$1.33 million. Under the agreement, The9 will subscribe for 11.08 million new shares in Singapore Myanmar Investco at an issue price of S$0.03 per share for S$332,500. This represents about 3.45 per cent of the company’s existing equity share capital. In addition, the company has granted The9 an option to subscribe for up to an additional 33.25 million new shares at an issue price of S$0.03 for each option share, for a sum of up to S$997,500. The issue price represents a 39.5 per cent premium to the volume weighted average price of the shares traded on the Singapore Exchange on June 21.
Nutryfarm International’s indirectly wholly-owned subsidiary, Global Agricapital (Thailand) Co (GAT), has landed a new sales order worth about 195 million yuan (S$40.59 million) from Moonda (Beijing) Agriculture Science and Technology Co for 300 containers of durians from Thailand. Separately, GAT has signed a new purchase agreement with Tianchue (Thailand) Co to procure 200 containers of durians from Thailand. The estimated total contract value is 115.2 million yuan. Recently incorporated in Thailand with a paid-up capital of five million baht (S$0.21 million), GAT will operate and manage the group’s durian trading business in Thailand.
The Ascott will spend S$210 million to acquire two properties in France and Vietnam through the Ascott Fund Serviced Residence Global Fund (ASRGF), its private equity fund with Qatar Investment Authority. The wholly-owned lodging business unit of CapitaLand has entered into two agreements to acquire the two properties on a turnkey basis. They are projected to open in 2024, CapitaLand said in a bourse filing on Monday. Ascott will acquire a freehold asset in Paris, which will be refurbished and fall under its lyf brand, making it Ascott’s first co-living property in Europe. Named livelyfhere Gambetta Paris, the 139-unit property is located in the 20th arrondissement, near galleries, cinemas, cafés and restaurants, street art and music venues. Ascott will also acquire the 364-unit Somerset Metropolitan West Hanoi. The asset is located in Hanoi’s new central business district and is close to several government agencies as well as local and international corporations. The property is also a 10-minute drive to the Vietnam National Convention Centre and half-an-hour drive to the Noi Bai International Airport.
The Competition and Consumer Commission of Singapore (CCCS) is seeking public feedback on a proposed joint venture (JV) framework agreement between Singapore Airlines (SIA) and Japan’s All Nippon Airways (ANA). Under the proposed partnership, which was entered into in January last year, the two carriers would work together on areas such as scheduling, pricing, sales and marketing as well as other commercial areas. This would also apply to their individual subsidiaries Air Japan Co and ANA Wings Co. CCCS will be seeking feedback from June 21 to July 12, after receiving a joint application for decisions from both airlines on the proposed commercial cooperation. It has accepted the application as complete as of June 2.
Singapore’s law ministry on Monday said it will extend the third-party funding (TPF) framework to cover domestic arbitration proceedings, connected court and mediation proceedings, starting from June 28. The framework will also cover proceedings commenced in the Singapore International Commercial Court (SICC), as well as related mediation, for as long as these proceedings remain in the SICC. The move comes amid the Covid-19 pandemic where there may be a rise in disputes and companies facing insolvency risks. Funding options such as the TPF allow litigants to pursue meritorious claims in permitted proceedings, as opposed to forgoing their legal rights due to financial constraints.
SGX lists eight actively traded S-Reits with properties in the United States (US). Five out of the eight S-Reits have pure exposure to the US and among them are three US office S-Reits. The US Centres for Disease Control and Prevention (CDC) on May 13 announced that fully vaccinated individuals do not need to wear masks outdoors and can avoid wearing masks indoors in most places, and updated that life can begin to return to normal despite caution issued by the World Health Organization (WHO). Nonetheless, US Office S-Reits remain sanguine about companies’ return-to-office plans and are adapting to agile and “new normal” arrangements as the US continues to push for normalcy and re-opening of sectors and industries.
The US Commerce Department said Monday it was rescinding a list of prohibited transactions with TikTok and WeChat that were issued in September as the Trump administration sought to block new US downloads of both Chinese-owned apps. The withdrawals came after President Joe Biden earlier this month withdrew a series of Trump-era executive orders that sought to ban new downloads of Tencent-owned WeChat and TikTok, and ordered a Commerce Department review of security concerns posed by those apps and others. The Commerce Department under Donald Trump also had sought to ban other transactions that would have effectively banned WeChat’s use the United States and later sought similar restrictions that would have barred TikTok’s use.
Google is closing its dedicated start-up space in London known as Campus. The Silicon Valley tech giant announced on Monday that it has decided “not to reopen” Campus in East London after it was forced to close by the coronavirus pandemic. “We’re closing Campus to support start-ups throughout the U.K.,” the company said, claiming that it can provide support for start-ups across the country without a physical space.
Amber Group, a cryptocurrency financial services firm, has raised $100 million as investors rush to back companies in the industry. The fresh funding round values the Hong Kong-based start-up at $1 billion. Investment bank China Renaissance led the round with participation from other high-profile investors including New York-based Tiger Global Management. Existing investors, which includes Coinbase’s venture arm, were involved. The latest funding round continues a flurry of funding activity in the cryptocurrency industry. In the second quarter of 2021, venture capital investment into cryptocurrency and blockchain start-ups totaled $14 billion, according to data from PitchBook provided to CNBC. That compares to just $600 million in the same period last year.
Rep. Jim Jordan, R-Ohio, the top Republican on the House Judiciary Committee, is shining a light on Microsoft as the committee prepares to mark up a series of antitrust bills based on a tech investigation that excluded the software giant. In a letter obtained by CNBC dated Monday, Jordan asks Microsoft President Brad Smith whether the company would be considered a “covered platform” under the antitrust bills introduced earlier this month by a bipartisan group of lawmakers. The package of five bills, set to be considered by the full committee on Wednesday, follows an investigation by the panel into Amazon, Apple, Facebook and Google. The bills would reshape antitrust laws in ways that would have clear impacts on those four businesses.
Uber is acquiring the remaining 47% interest in grocery delivery start-up Cornershop in an all-stock transaction, the company said Monday. The acquisition shows how Uber is investing more outside its core ride-hailing business, which has so far failed to prove profitable. Shares of Uber were up about 0.66% before markets opened on Monday. The deal comes nearly two years after Uber bought a majority stake in Cornershop for an undisclosed sum. Cornershop currently operates in the U.S., Peru, Brazil, Colombia and Canada.
American Airlines said it canceled hundreds of flights over the weekend due to staffing shortages, maintenance and other issues, challenges facing the carrier as travel demand surges toward pre-pandemic levels. About 6% of the airline’s mainline schedule, or 190 flights, were canceled on Sunday, according to flight-tracking site FlightAware. The airline said that equaled about 3% of its total flights, including those operated by regional carriers. An internal company list, which was viewed by CNBC, showed about half of those were because of unavailable flight crews. On Saturday, about 4% of its mainline schedule, or 123 flights, were canceled and 106 on Monday, FlightAware showed. American said it is trimming its overall schedule by about 1% through mid-July to help ease some of the disruptions, some of which it said resulted from bad weather at its Charlotte and Dallas/Fort Worth International Airport hubs during the first half of June.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
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