Daily Morning Note – 22 October 2018
WEEKLY MARKET OUTLOOK WEBINAR
Register HERE for MONDAY’s 11.15am webinar.
Archived webinars available.
YOUR PHILLIP SUMMARY
Stocks in Asia were mixed on Friday after China’s GDP growth for the third quarter of 2018 came in below expectations, which showed economic growth slowing to 6.5 percent year-over-year.
After a turbulent morning, Greater China markets rebounded strongly, following a series of measures by China’s securities regulator to support the struggling stock market. Over in Japan, however, the Nikkei 225 slipped 0.56 percent to close at 22,532.08, while the Topix index declined by 0.69 percent to end the trading week at 1,692.85.
Singapore Exchange Limited – Derivatives thriving from volatile environment
Target Price: S$9.01
·1Q19 Revenue and PATMI was 5.6% and 6.5% lower than estimated respectively, due to weaker than expected revenues from Post Trade Services and Issuer Services.
·Securities business missed our estimates by 6.6% as the weaknesses in emerging markets and concerns over economic conditions lead to weaker flows.
·Derivatives business was the standout performer, achieving strong record revenues with a surge of 17% YoY in volume.
·Interim dividend per share spiked up 50% to 7.5 cents (1Q18: 5 cents); due to a change in dividend policy announced last quarter.
·We maintain our BUY recommendation for SGX and raise our Target Price to S$9.01 (previously S$8.93). We have changed our valuation method from DCF to P/E ratio multiple. Our Target Price is driven by 25.2x PER, in line with SGX’s peers.
Singapore’s business community has welcomed Friday’s signing of the European Union-Singapore Free Trade Agreement, with exporters of electronics, pharmaceuticals, chemicals and processed food products particularly well-placed to benefit.
AVIC International Maritime Holdings announced on Sunday evening that its controlling shareholder, Hong Kong-listed AVIC International Holdings, has informed AVIC that it is in preliminary discussions with potential investors for a possible disposal of its ship business.
Lion Asiapac cautioned on Saturday that it expects to report a loss for the first quarter ended Sept 30, due primarily to unrealised exchange loss arising from the depreciating Chinese yuan.
Viva Industrial Trust announced a clean-up distribution per stapled security of 1.692 Singapore cents, in line with the merger of ESR-Reit and VIT.
Sembcorp Marine and Teekay Offshore Partners have signed a US$166 million agreement for engineering, procurement and construction works related to the modification, repair and life extension of Teekay’s Petrojarl Varg FPSO ship.
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.|