Daily Morning Note – 23 May 2019


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Please ignore the ComfortDelGro report summary issued in error within the 17 May 2019 edition of Morning Note. We apologise for the error. Thank you for your understanding.


Asian stocks looked set for modest declines after U.S. equities slipped and Treasuries climbed amid ongoing trade-war tensions. The dollar steadied after Federal Reserve minutes reiterated its patient stance on policy.

Trade tensions between the U.S. and China are starting to pull foreign-exchange markets into the arena. Yet far from embracing their currencies as a weapon, many countries are being forced to take a defensive posture against the almighty dollar.


Wilmar International Ltd

Current Sentiment: BULLISH

Wilmar bullish has come to a halt and base on the technical factors presented, the market has identify 3 area of value which the market will most likely to rebound after the correction.


Banyan Tree Holdings Limited – Plagued by one-offs

Accumulate (Maintained); Target price: S$0.76, Last close: S$0.54

– Revenue and PATMI below our expectations due to under-forecasted one-offs
and continued weakness in Thailand. Excluding other income, PATMI would
have risen c.50%.

– One-offs from reduced stake in BTAC and disposal of Seychelles portfolio to
continue into the rest of FY2019.

– Effective cost measures across the board, with total costs and expenses
declining -23%.

– Forward bookings edged back up after a decline in 1Q19, up 11% YoY for 2Q19
(+6% YoY for Thailand market and +26% YoY for Non-Thailand markets).

– Hotel investments segment still suffering from Thailand underperformance,
stemming from the inventory shortage from ongoing renovations at flagship
resort Banyan Tree Phuket.

– Long-term growth catalysts remain intact. Focus would be the continued buildup
in fee-based income and property sales. 53 hotels under the Banyan Tree
umbrella of brands are slated to open from 2019 to 2022.

– Maintain ACCUMULATE with unchanged target price of S$0.76.

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Federal Reserve says economic risks have receded. Risks to the US economic outlook, including trade uncertainty and Brexit, have receded but are still present, the US Federal Reserve said on Wednesday. And with inflation pressures still muted the central bank can afford to be patient before deciding on any further rate moves, according to the minutes of the April 30-May 1 policy meeting, when the Fed left the key lending rate unchanged.

US judge says Qualcomm violated antitrust law; appeal planned, shares plunge. Qualcomm Inc illegally suppressed competition in the market for smartphone chips by threatening to cut off supplies and extracting excessive licensing fees, a US judge ruled, a decision that could force the company to overhaul its business practices. The decision issued late Tuesday night by US District Judge Lucy Koh in San Jose, California, caused Qualcomm shares to plunge 11 per cent on Wednesday.

MAS, ABS set up steering group for better conduct among banks in S’pore. A steering group has been set up to foster more rigorous culture and conduct practices among banks in Singapore, said the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) on Wednesday. The Singapore regulator has been intensifying its supervision of financial institutions in the past two years, including conducting culture and conduct surveys at several banks, as well as thematic inspections of incentive structures.

SingHaiyi posts 47.6% rise in Q4 net profit to S$9.74m. Real estate group SingHaiyi on Wednesday announced that Q4FY19 net profit rose 47.6 per cent year-on-year to S$9.74 million. Revenue declined 67.6 per cent to S$9.84 million mainly due to the decrease in revenue recognised for the completed executive condominium project, The Vales, and the private condominium, City Suites. Earnings per share came to 0.228 Singapore cent versus 0.209 cent previously.

Yongnam inks agreement for proposed placement of convertible bonds. Yongnam Holdings has entered into a placement agreement to raise capital by placing out up to S$15 million worth of redeemable convertible bonds. The maturity date of the non-listed bonds is two years from the issue date, and the bonds will bear interest at a rate of 7 per cent per annum, payable every six months. The conversion price of S$0.179 represents a premium of approximately 6.55 per cent to the prevailing market price of the shares prior to the signing of the placement agreement.

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

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