Daily Morning Note – 24 January 2019
WEEKLY MARKET OUTLOOK WEBINAR
Register HERE for MONDAY’s 11.15am webinar.
Archived webinars available.
YOUR PHILLIP SUMMARY
Asian equities look set for a mixed open after U.S. shares fluctuated Wednesday, ultimately edging higher after whipsawing investors throughout the day amid the ongoing debate over the outlook for global growth. The dollar’s six-day rally stalled and crude oil dropped after an earlier increase. The S&P 500, Dow and Nasdaq all turned green in the last hours of trading. Stock had initially rallied in the wake of a spate of better-than-forecast quarterly earnings from IBM, Procter & Gamble and United Technologies before dropping into the red mid-session.
China’s vice president said the world’s second-largest economy has delivered “significant” growth and pledged to the World Economic Forum in Davos, Switzerland, that it won’t falter. Brazil’s stock market cruised into new record territory Wednesday hitting 96,558 points, after Economy Minister Paulo Guedes reaffirmed plans to cut public spending while in Davos.
The beleaguered Australian dollar faces a growing threat: an addiction to real estate is creating a debt mountain. After being the worst-performing developed-nation currency in 2018, the Aussie is set to extend losses this year as rising indebtedness at households and the economy overall make it more likely the Reserve Bank of Australia will cut interest rates, according to both HSBC Holdings Plc and Rabobank.
Equity futures in Tokyo and Hong Kong dropped, while shares in Sydney were little changed.
CapitaLand Mall Trust – Still-weak reversions despite underlying recovery in tenant
Recommendation: NEUTRAL (Maintained); Last close S$2.31;
Target Price: S$2.09; Analyst: Tara Wong
– FY18 NPI and DPU in line with our forecast. Higher revenue in 4Q18 4Q18 from
remaining 70% stake of Westgate acquired on 1 Nov 2018.
– Slight recovery in tenant sales, with recovery in key trade categories.
– Stable portfolio occupancy amidst AEI works at Westgate and Tampines Mall.
– Still-weak rental reversions. Higher gearing and shorter term to maturity now with
debt consolidated from Infinity Mall Trust (which holds Westgate).
– Maintain Neutral with unchanged TP of S$2.09.
Mapletree Industrial Trust – Negative rental reversions
Recommendation: NEUTRAL (Downgraded); Last Close Price: $1.96;
Target Price: $2.03 (unchanged); Analyst: Richard Leow
– Revenue and DPU were in line with our expectation
– Positive inorganic contribution outweighed the underlying rental renewal weakness
– Distribution reinvestment plan (DRP) from 2Q19 had 40.6% take-up rate (historical
average: 42%); resulted in $22.8million cash retained
– DRP continued in 3Q19 to fund development project costs
– Downgrade to NEUTRAL; unchanged target price of $2.03
Koyo International Limited has been awarded a S$77 million contract for the supply and installation of mechanical services for Kim Chuan Depot Extension for Circle Line 6 by the Land Transport Authority.
Cromwell European REIT has completed the acquisition of three logistics assets in France.
Sony will shift its European headquarters from Britain to the Netherlands to avoid Brexit-related customs issues, but operations at its current UK company will remain unchanged.
Certificate of entitlement (COE) prices ended mostly higher on the back of sales whipped up by the recently concluded Singapore Motorshow.
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.|