Daily Morning Note – 24 Oct 2019



Stocks in Asia looked primed for gains following an advance in U.S. equities, as earnings provided some optimism against a backdrop of concern for global economic growth. Equity futures in Japan, Hong Kong and Australia advanced, while the S&P 500 earlier added 0.3% and closed above the 3,000 level. While the picture isn’t uniformly positive, earnings season is dampening some fears that corporate outlooks are souring. About 80% of companies on the S&P 500 have topped expectations for profits, though Texas Instruments and Caterpillar both showed how uncertainty stemming from trade tensions and global economic weakness are making customers nervous. Treasuries yields rose off the lows of the session, while the dollar traded flat, and oil surged.


The International Monetary Fund on Wednesday cut its growth projection for Singapore to 0.5 per cent in 2019, down from an earlier estimate of 2 per cent in July, due to strong export headwinds and the downturn in the electronics cycle.

ST Engineering’s US marine subsidiary has been ordered following arbitration proceedings to pay US$18 million to a customer. Consequently, it would make a further provision of about S$14.2 million in the financial statements for the period ended Sept 30 as an adjusting subsequent event.

San Teh cash offer to delist extended to Nov 7. Singapore San Teh Real Estate, the offeror through which the Kao family is making the offer, together with concert parties controls or had agreed to acquire a total of 89.83 per cent of all shares in San Teh, as at 5pm on Oct 23.

Wing Tai Holdings’ net profit more than tripled to S$6.8 million for the first quarter ended Sept 30, thanks to a 20 per cent reduction in cost of sales and higher profits from associates and joint ventures.

Property Guru. abandoned its proposed flotation on the Australia Securities Exchange, citing uncertainty in the initial public offering market. People familiar with the deal said that the order book could not be filled even at the bottom end of the price range. The move to scrap the IPO was thus unsurprising, especially with no strategic investors coming in yet.

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


CapitaLand Mall Trust – Sunlight through the clouds

Recommendation: NEUTRAL (Maintained) Last Done: S$2.62

Target Price: S$2.68, Analyst: Natalie Ong

– 3Q19 NPI and DPU in line with our forecast, with 3Q19/9M19 DPU forming 26.4%/76.4% of our DPU forecast.

– Higher occupancy and positive portfolio rental reversions, with YTD tenant sales falling less than RSI Ex. MV (-1.3% vs -1.8%1)

– Maintain Neutral with unchanged TP of $2.68.

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