Daily Morning Note – 25 January 2021

PHILLIP SUMMARY

Asian stocks looked set for a muted start to the week as traders awaited a Federal Reserve policy meeting and a flurry of earnings reports against the backdrop of the worsening pandemic. The dollar was steady after Friday’s gains. Futures were little changed in Japan and Hong Kong and shares saw modest gains in Australia. S&P 500 contracts ticked higher after the benchmark slipped Friday for the first day in four amid concern that a new coronavirus strain may be deadlier than earlier variants. Treasury yields retreated. Oil prices were little changed Monday.

BREAKING NEWS

CAPITALAND announced in its profit guidance on Friday that it is expecting to report a loss for the full year ended Dec 31, 2020 as a result of the impact from revaluations and impairments. Based on indicative values, the company’s share of fair value losses is expected to be in the range of S$1.55-1.65 billion, compared with the gain of S$674.8 million a year ago. This fair value loss represents about 4.7 per cent of the group’s investment properties portfolio value.

THE Singapore Exchange (SGX) on Friday posted a net profit of S$239.8 million for the half year ended Dec 31, 2020, up 12.4 per cent from S$213.3 million a year ago. This came mainly from revenue increases across all three of its businesses: equities; fixed income, currencies and commodities; and data, connectivity and indices, it said in a regulatory filing. Earnings per share stood at 22.4 Singapore cents for the half year, up from 19.9 cents a year ago.

MAINBOARD-LISTED retailer FJ Benjamin Holdings announced in a regulatory update on Sunday that it has obtained an in-principle approval from the Singapore Exchange (SGX) to transfer to the Catalist board.This is subject to certain conditions, including obtaining shareholders’ approval. In an earlier announcement in October last year, FJ Benjamin said that listing on the Catalist will put it in a better position to attract investors in the future.

FOOD and beverage (F&B) play Jumbo Group announced on Sunday that its indirect wholly owned subsidiary has entered into a joint venture (JV) agreement with The Art of Mee Pok to run outlets selling Teochew fishball and minced meat noodles. The subsidiary, Jumbo Group of Restaurants, will be subscribing for 6,000 ordinary shares for an aggregate consideration for S$6,000 while The Art of Mee Pok will subscribe for 3,998 ordinary shares for S$3,998.

JAPANESE department store operator Isetan (Singapore) announced on Friday that it is currently “exploring its options” regarding its strata area at Wisma Atria building along Orchard Road. It added that it may be appointing property agents and valuers to assist the company, and to commence exploratory discussions with third parties. However, shareholders and potential investors should note that all options regarding Isetan Wisma Atria are being evaluated, and no definitive decision or agreement has been made.

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

TECHNICAL REPORTS

Singapore Exchange Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

SGX Ltd (SGX: S68) Technical is pointing to a further upside after the stock has broken the long-time resistance at $9.30 and has met our previous target price based on our report on 26th November 2020.

Tesla Inc

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Tesla Inc (US: TSLA) Technical indicate that it is poised for an upside after a series of consolidation last week.

>> Read more Technical reports

RESEARCH REPORTS

Frasers Centrepoint Trust – Portfolio optimisation & reconstitution to drive growth

Recommendation: BUY (Maintained), Last Done: S$2.59

Target Price: S$2.93, Analyst: Natalie Ong

– No financials disclosed in this operational update. FCT delivered a positive surprise some malls outperformed our occupancy forecasts. Lease renewals on track despite industry leasing weakness.


Maintain BUY, with DDM TP raised from S$2.79 to S$2.93 for lower beta and cost-of-equity assumptions. Beta lowered from 0.7 to 0.65 to reflect stability of assets. As a result, cost of equity drops from 6.75% to 6.38%. Stock catalysts expected from growth in catchments surrounding FCT’s malls and synergies after ARF acquisition.

Singapore Exchange Limited – High noon

Recommendation: ACCUMULATE (Maintained); TP: S$11.01 (prev. S$9.45)

Last Done: S$10.07; Analyst: Tay Wee Kuang

– 1H21 revenue in line but earnings beat our estimate by 12% on lower operating expenses.

– FICC and DCI grew 17% and 35% YoY, led by newly-acquired businesses, BidFX and Scientific Beta, respectively.

– Average fee per contract for equity derivatives fell from S$1.34 to S$1.27 due to fee holiday during transition from expiring MSCI products to FTSE replacements.

– Laid out pipeline for growth, which includes expanding suite of products with FTSE Russell and developing indices under Scientific Beta to capture new investment trends.
– Maintain ACCUMULATE with higher TP of S$11.01, from S$9.45. FY21e earnings raised by 8% toincorporate full-year expense guidance of S$535-545mn. Now peg our TP at 5-year historical average of 22.3x P/E vs. -1SD previously in view of its stronger growth prospects.

SG Bonds Weekly – Week 4: SG Earnings Season Begins

Credit Analyst: Timothy Ang

– Multiple REITs to announce earnings this week.

– China cements its strong economic recovery as it reported GDP grew 6.5% in the fourth quarter of 2020, resulting in a positive 2.3% GDP growth for the full year of 2020.

– It has been a busy week for ESG investors, with 6 out of 20 deals priced belonging to the ESG sector, totaling USD 5.45bn in volume printed.

– New issue pipeline remains heavy with 7 new mandates outstanding.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

Webinar Of The Week

Market Outlook: : (PSR) Singapore REITs Monthly, SIA Bonds, Fortress Minerals Limited & SG Weekly

Date: 18 January 2021

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #29 – Keppel Corporation; Initiation

For more videos on Phillip in 3 Mins

Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information





Disclaimer
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 揳s 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.
Confidentiality Note
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.