Daily Morning Note – 23 Febraury 2021

PHILLIP SUMMARY

Wall Street largely retreated on Monday, with tech stocks taking the biggest hit amid growing concerns that borrowing rates will creep higher as the US economy – and prices – recover.

The benchmark Dow Jones Industrial Average reversed early losses to close with a gain of less than 0.1 per cent at 31,521.69.

But the broad-based S&P 500 fell about 0.8 per cent to finish at 3,876.5, while the tech-rich Nasdaq Composite Index was the big loser, dropping 2.5 per cent to 13,533.05.

As Congress moves towards approving a huge US$1.9 trillion economic stimulus package, which will provide a jolt to growth and job creation, investors have pushed yields on 10-year Treasury notes higher – typically a sign inflation and interest rates will rise as well.

BREAKING NEWS

SG

Raffles Medical Group announced a net profit of S$65.9 million for the year ended Dec 31, 2020, up 9.3 per cent from S$60.3 million a year ago, following its involvement in various Covid-19-related projects. The group is now expecting a shift in focus from Covid-19 testing to the ongoing vaccine rollout. Executive chairman Loo Choon Yong said in a media briefing on Monday that with Covid-19 testing capabilities stabilised, more effort will be put into the administration and dissemination of vaccines.

Indonesian palm oil producer Bumitama Agri posted a 51.9 per cent rise in net profit for H2 of fiscal 2020, on the back of higher palm oil prices. Net profit for the six months ended Dec 31, 2020, stood at 685.14 billion rupiah (S$64.4 million), compared with a net profit of 451.07 billion posted the same period a year ago. The results translate to earnings per share (EPS) of 392 rupiah, against EPS of 258 rupiah a year ago.

Mainboard-listed ISDN Holdings is expecting revenue of S$361.9 million for the full year ended Dec 31, 2020, approximately 24 per cent higher compared to FY2019. The projected revenue growth comes as company management accounts showed that the group experienced strong growth momentum during the financial year, said the engineering solutions provider in a filing on Monday.

Property developer City Developments Limited (CDL) is acquiring a 55 per cent stake in a Shenzhen technology park from its joint-venture investment Sincere Property Group and from two entities of China Ping An for RMB 850 million (about S$174 million). Sincere, which has been facing a liquidity crunch owing to the pandemic as well as tighter rules in China governing financing for real-estate developers, will reduce its gearing as a result of the acquisition, CDL said.

Agribusiness Wilmar International is set to hand out its highest-ever total cash dividend since listing, at S$0.195 per share for FY2020, amid a 18.6 per cent lift in full-year earnings disclosed on Monday after trading hours. The mainboard-listed firm has proposed a special dividend of S$0.065 and final dividend of S$0.09 per share for the half-year ended December. Its interim dividend in August was S$0.04 cents per share. Wilmar’s sweetener for shareholders comes as its net profit for FY2020 surged 18.6 per cent to US$1.53 billion, on the back of a 18.5 per cent rise in revenue to US$50.5 billion, driven by growth across all segments.

Analgesic maker Haw Par Corporation saw earnings fall 34.3 per cent to S$119.8 million for FY2020 ended December. Revenue for the full-year plunged 54.5 per cent year-on-year to S$111.03 million, hit by weak consumer spending amid the Covid-19 outbreak, the company said in its results on Monday evening. But its bottom line still exceeded revenue, thanks to S$106.8 million in other income, arising from dividend and interest income.

US

Royal Caribbean Group said it was seeing an uptick in future bookings, following a disastrous year for the cruise operator, as travel enthusiasts look to sail again at a time governments globally have started mass vaccinations. Royal Caribbean said it recorded a 30 per cent increase in new bookings since the beginning of the year when compared to November and December.

Goodyear Tire & Rubber Co said it would acquire Cooper Tire & Rubber Company for about US$2.8 billion to double its presence in North America and China. Goodyear said the deal also broadens the distribution for Cooper replacement tires through its retail store network. Under the terms of the deal, Cooper shareholders will receive US$41.75 per share in cash and a fixed exchange ratio of 0.907 shares of Goodyear common stock.

Australia will not change proposed laws that would make Alphabet Inc’s Google and Facebook pay news outlets for content, a senior lawmaker said on Monday, despite vocal opposition from the Big Tech firms. Facebook has strongly protested the laws and last week abruptly blocked all news content and several state government and emergency department accounts. The social media giant and Australian leaders continued discussing the changes over the weekend.

Boeing urged airlines to suspend the use of 777 jets with the same type of engine that shed debris over Denver at the weekend after US regulators announced extra inspections and Japan suspended their use while considering further action. The moves involving Pratt & Whitney PW4000 engines came after a United Airlines 777’s right engine failed on Saturday, scattering its protective outer casing over a residential area.

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

TECHNICAL REPORTS

Frencken Group Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical SELL

Frencken Group (SGX: E28) upside has come to a halt after technical indicate potential further downside.

Mapletree Industrial Trust

Analyst: Chua Wei Ren

Recommended Action: Technical SELL

Frencken Group (SGX: E28) upside has come to a halt after technical indicate potential further downside.

>> Read more Technical reports

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