Daily Morning Note – 25 June 2019
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YOUR PHILLIP SUMMARY
US stocks ended mostly lower on Monday, with only the blue-chip Dow managing to hold onto slight gains, as geopolitical tensions in the Middle East weighed on the oil sector. The Dow Jones Industrial Average was up 9 points, or less than 0.1%, to around 26,728, based on preliminary numbers. The S&P 500 was down 0.2% to finish around 2,945. The Nasdaq Composite fell 0.3% to end around 8,006.
President Donald Trump signed an executive order sanctioning Iran’s leaders. U.S. oil futures settled higher on Monday, even as energy stocks were among the worst performers for the day. However, treasury yields slipped Monday as traders geared up for President Donald Trump’s meeting with his Chinese counterpart Xi Jinping. Investors were mostly focused on the upcoming G-20 meeting at the end of the week, with many hoping US and China will reach a deal to prevent a further escalation in trade tensions.
TECHNICAL PULSE
Olam International Ltd
Recommended Action: Technical BUY
Olam International has been going on strong since the rebound from 1.75 in June 2019. However, the stock has arrived near the psychological resistance of 2.00 as of Monday, 24th June 2019. To enter long buy now is considered a risky move as price as already move way high than the market expectation.
RESEARCH REPORT
Ping An Bank Co Ltd – Robust deposit growth and improving asset quality
Analyst: Jieyuan Zheng
– Ping An Bank (PAB) reported 1Q19 net profits of Rmb7.4bn, up 13% YoY.
– Earnings were driven by rapid growth 13% QoQ in retail deposits. Net Interest Margin (NIM) improved 3bps QoQ to 2.53% driven by declining interbank funding costs.
– NPL ratio reported 1.73% contracted by 2bps QoQ. However, the rise in NPL % of non-collateralized consumption loans, a source of concern on asset quality going forward.
– Overall, we consider 1Q19’s result positive. Mainly because of company’s robust deposit growth and improving asset quality.
Amazon.com Inc – Prime opportunities ahead
Analyst: Edmund Xue
– Grocery and pharmacy represent a combined $900bn Total Addressable Market (TAM) opportunity for Amazon.
– Amazon Web Services (AWS) will continue to experience stellar growth with the hybrid cloud market growing 23% CAGR to US$92bn by 2021.
– Advertising is the key growth driver that may translate to an additional US$3bn revenue gain in 2019
BREAKING NEWS
THE Singapore Exchange (SGX) has rejected Foreland Fabrictech Holdings’ appeal against its delisting and request for up to three months to prepare its proposal for the resumption of trading. The Chinese textile company will be delisted from the main board on June 28, with effect from 9 am.
Microsoft missed its chance to be the dominant firm in mobile technology because it was “distracted” during a lengthy antitrust battle with US authorities, company co-founder Bill Gates said Monday.
Music streaming service Spotify Technology SA pays Apple Inc a 15 per cent fee on about 680,000 of its 100 million premium customers, Apple disclosed in a response to Spotify’s complaint with European antitrust regulators.
Gold prices rose more than 1 per cent on Monday to a near six-year peak as the dollar fell, with safe-haven bullion also boosted by US President Donald Trump’s announcement to impose fresh sanctions on Iran.
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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