Daily Morning Note – 22 September 2021


Wall Street equities on Tuesday tried to recoup some of their losses from the sharp slump seen in the previous session’s trading but ultimately were unsuccessful. Major US indices were hammered on Monday amid fears over Evergrande, a Chinese property giant that’s US$300 billion in the hole and verging on collapse. It seemed as if those worries were dialed back a notch on Tuesday as traders became confident Evergrande’s troubles would not cause a larger shock. But the modest rally seen in the day’s trading petered out by the close, with investors staying cautious as the saga continued ahead of the conclusion of the Federal Reserve’s two-day meeting set for Wednesday.


SG News

IOI Properties’ S$1.508b sole bid for Marina View white site surprises market. watchers were mostly surprised with the outcome of Tuesday’s tender closing for a white site along Marina View earmarked largely for private residences and hotel use. The plot, which was triggered earlier from the government’s reserve, list drew just one bid at tender. And the sole bid – S$1.508 billion or S$1,379 per square foot per plot ratio – from a wholly-owned unit of IOI Properties Group – was just S$101 more than the price at which the group successfully applied for the site to be released from the reserve list of the first-half 2021 Government Land Sales Programme.

Nanofilm Technologies founder and executive chairman Shi Xu has sold a one per cent stake of the company’s total issued shares to Venezio Investments, an indirect wholly-owned subsidiary of Temasek Holdings, on Tuesday, according to a regulatory filing after markets closed. Venezio Investments will pay S$27.1 million for the approximately 6.6 million shares that it will receive and the sale is expected to be completed in a week’s time.

Singapore Exchange (SGX) has seen a flurry of privatisation offers this year – at a rate of more than one a month – in what market watchers say is part of a global trend amid the Covid-19 pandemic. “Clearly, the owners (of the listed companies) see a disparity between its value and market price, and are taking advantage of this,” said Justin Tang, head of Asian research at United First Partners. The latest in the rash of delisting talks was for property and hospitality group Roxy-Pacific Holdings, which on Monday received a preconditional voluntary general offer from a consortium including chairman and chief executive Teo Hong Lim for all the issued ordinary shares in the company.

Biolidics on Monday said it has developed a new ClearEpi NAB Test product which detects an individual’s protective immunity against Covid-19. The medtech company has also obtained confirmation for the CE marking of the product. This allows it to market and sell the ClearEpi NAB Test in the European Union (EU), as it complies with the relevant EU safety, health and environmental protection requirements.

Sembmarine has fully utilised the last S$160 million of S$600 million in cash proceeds raised from its S$2.1 billion rights issue in 2020. In a bourse filing to the Singapore Exchange on Tuesday morning, the group said the cash was used for working capital purposes as intended. The bulk of it, or S$66 million, used to pay for subcontractors’ labour services. S$58 million was deployed as payment for materials and equipment, while the outstanding S$36 million was used as payment for employees’ payroll expenses.

US News

The US Justice Department filed a lawsuit Tuesday to block the alliance between American Airlines and JetBlue that it says will harm travelers by reducing competition. “In an industry where just four airlines control more than 80 percent of domestic air travel, American Airlines’ ‘alliance’ with JetBlue is, in fact, an unprecedented maneuver to further consolidate the industry,” Attorney General Merrick B. Garland said in a statement.

With Chinese real estate giant Evergrande teetering on the brink of collapse, the head of the US markets regulator said on Tuesday the American financial system is better prepared than it was in 2008 to withstand the possible fallout from a major bankruptcy. “We are in a highly interconnected global economic system” and “it’s possible from time to time that we, too, in America will react to other economies’ and nations’ shocks,” said Gary Gensler, head of the Securities and Exchange Commission (SEC). However, he declined to comment specifically on Evergrande, the developer struggling under the weight of US$300 billion in debt, which appears on the verge of collapse.

The biggest US banks appear to be sidestepping any fallout from the crisis at indebted developer China Evergrande Group that sparked a widespread selloff in stocks this week. Citigroup has no direct lending exposure to Evergrande, a spokeswoman said. JPMorgan Chase & Co. and Bank of America Corp. also have no such links, according to people familiar with the matter, who asked not to be identified discussing private information. Bank of America has no indirect exposure because it limits business in China to subsidiaries of US companies, one of the people said. “Our indirect exposure through counterparty credit risk is small and with no single significant concentration,” Danielle Romero-Apsilos, a spokeswoman for Citigroup, said in an emailed statement.

A Democrat-backed bill to fund the US federal government through Dec 3 and suspend its borrowing limit until the end of 2022 cleared a House of Representatives procedural vote on Tuesday, advancing to a final debate and vote. Even if the measure passes the Democratic-controlled House when it votes on the full bill later on Tuesday, it faces a major roadblock in the Senate, where Republicans have vowed to oppose it. House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer set the stage for a showdown with Republicans on Monday when they said they would combine spending and debt measures in one bill, despite Senate Republican Leader Mitch McConnell’s vow to block an increase in the US$28.4 trillion debt ceiling.

JPMorgan said on Tuesday it had acquired Frank, a college financial planning platform used by over 5 million students in the United States. The deal is the latest in a string of acquisitions by the largest US bank, and will allow the bank to deepen ties with students, it said. The financial terms of the deal were not disclosed. In recent months, the bank has also bought British digital wealth manager Nutmeg, fintech OpenInvest and Infatuation, owner of the restaurant review brand Zagat.

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

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