Daily Morning Note – 22 March 2019
WEEKLY MARKET OUTLOOK WEBINAR
Register HERE for MONDAY’s 11.15am webinar.
Archived webinars available.
YOUR PHILLIP SUMMARY
U.S. equities extended gains as investors digested a dovish lurch by policy makers in the world’s largest economy. The dollar rebounded after Wednesday’s loss, while government bond yields stabilised.
After the Federal Reserve announced yesterday that it had no plans to raise rates in 2019, stocks resumed their upward charge. The S&P 500 Index crossed the 2,850 level amid a broad-based advance Thursday that saw tech shares climbing alongside materials and real estate. Financials sat out the rally as the yield on 10-year Treasuries hovered near the lowest level in more than a year after sharp declines Wednesday.
The British pound slumped as pressure built on Theresa May to gather a majority for her Brexit deal. The U.K. prime minister is at loggerheads with the European Union over an extension to the March 29 deadline for Britain to exit the bloc, threatening to increase the chances of a no-deal departure. A rate hold by the Bank of England had little impact on the currency.
China Strategy – Foreign capital will continue to flow in
Analyst: Jieyuan Zheng
– The inclusion factor of A shares in the MSCI Emerging Markets Index will
increase to 20% in three steps, which is expected to bring more than $50bn into
the A shares market.
– In 2019 multiple indexes will include China A-share and RMB bond into their
flagship index. Foreign investment into A-shares and bond market will
deepen. Stock connect will become the main investment channel.
– Foreign capital currently prefers consumer sectors and the proportion of
emerging industries is expected to increase in the future.
Pharmaceuticals – Three therapies to support growth
Analyst: Edmund Xue
– We expect an 18.6% CAGR for the oncology therapeutic segment, which is the
key lever of growth along with anti-infection and endocrinology.
– The average operating margin for big pharma increased by 29.2% YoY in Q4
2018. We expect strong operating margins looking forward despite pricing
– There is a positive outlook for the R&D pipeline for pharma, which will help to
weather LOE and biosimilar headwinds.
– U.S. and pharmerging markets, especially China, will lead growth for the global
– We are EQUAL-WEIGHT on the pharma sector. Our preferred stocks are Eli Lilly
(LLY) for its expanding pipeline and solid product launches, and Merck & Co
(MRK) for its favourable margin expansion opportunities with its Keytruda
Boeing‘s 737 Max aircraft will be outfitted with a warning light for malfunctions in the anti-stall system suspected in October’s fatal crash in Indonesia, an industry source told AFP.
Amazon.com Inc has hit on a new way to grab a chunk of the US$129 billion digital advertising market now dominated by Google and Facebook: sell video spots on the e-commerce giant’s smartphone shopping app.
Facebook on Thursday admitted that millions of passwords were stored in plain text on its internal servers, a security slip that left them readable by the social networking platform’s employees.
A Google executive offered new details on Wednesday about the company’s upcoming video game streaming service, telling Reuters that game makers may use competing cloud providers and must avoid some inappropriate content.
Shares in Levi Strauss & Co surged 31 per cent in their debut on Thursday, giving the jeans maker a market value of US$8.7 billion and suggesting strong investor appetite before much-awaited listings from Lyft and Uber.
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
|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 “as 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.|
|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.|