Daily Morning Note – 25 May 2021
Oil prices rose more than 3 per cent on Monday as a demand bump fueled by Covid-19 vaccination drives gave traders optimism that the market can absorb any Iranian oil that would come on the market if Western talks with Tehran lead to the lifting of sanctions. A decline in deaths due to Covid-19 in India also bolstered expectations that oil demand could rise in coming weeks. Brent crude oil futures settled up US$2.02, or 3 per cent, at US$68.46 a barrel, while July US West Texas Intermediate ended at US$66.05 a barrel, up US$2.47, or 3.9 per cent.
Thai Beverage will be holding an annual information meeting for shareholders in Singapore to hear from the key directors and management. The virtual meeting, by means of a live webcast with video (audio-visual) and audio-only feeds, will take place on June 21 from 11 am to noon. At the meeting, the company will furnish more insight into and updates on its business. The presentation slides used during the information meeting will also be made available to all shareholders through SGXNet and its website after the information meeting.
China Sky Chemical Fibre is unable to provide an exit offer as it does not have sufficient financial resources, and none of its controlling shareholders have expressed any intention to do so. The company, which is now under judicial management, said in a regulatory filing on Monday that its creditors are not interested in making an exit offer.
Spindex Industries on Monday warned of an impact on its Malaysia factory as it limits operations in line with tightened Movement Control Orders by the Malaysian government. The Tightened Movement Control Order (TMCO3.0) has regulated that only 60 per cent of all staff are allowed to be at the workplace, and the balance 40 per cent has to work from home, the group said, adding that this will take effect on May 25, and last till June 7. Spindex said that this will affect the number of operational staff available to work on site, and “there will be an impact to its Malaysia factory as operations are reduced”.
Mary Chia Holdings on Monday applied for an extension of time to announce the group’s unaudited financial statements for the financial year ended March 31, 2021. It is asking for a month’s reprieve so it can file its financial statements by June 30 instead of May 30. Explaining its request, the group said that its finance team in Malaysia have had to work from home due to the latest Movement Control Order (MCO) and had “limited access to the accounting system”. Its outlets were also “either closed or disallowed to operate at full capacity”.
Dyna-Mac Holdings, which fabricates topside modules and structures for the offshore oil and gas industry, has secured a S$197 million contract from repeat customer BW Offshore group for a fabrication project. The contract was signed with a wholly-owned subsidiary of the BW Offshore group, it said in a statement on Monday. Under the contract, Dyna-Mac will supply, fabricate and construct topside modules for the Barossa Floating Production Storage Offloading (FPSO) vessel. The vessel will be operating in offshore Darwin in northern Australia.
Singapura Finance disposed of its stake in MatchMove PowerBank(S) following its unsuccessful attempt to obtain a digital bank licence in Singapore, the mainboard-listed lender said in a regulatory filing on Monday.
The lender said it sold the stakes it has in MatchMove PowerBank – about 10 per cent on a fully-diluted basis – on Monday to MatchMove Pay in exchange for a further 0.3 per cent stake in MatchMove Pay from a stake of 1.6 per cent.
Wall Street stocks were back in rally mode on Monday, shrugging off recent bouts of volatility and embracing hopes for brighter days as the pandemic ebbs. High inflation readings, chaos in the cryptocurrency markets and supply chain challenges as major economies reopen have stymied equities in recent weeks, but concerns about their effects on business took a back seat as this week’s trading got underway.
Square closed up 5.5% on Monday after Bloomberg News reported the payments company could offer savings and checking accounts in the near future. The report said a code within a Square app update revealed the company’s plans including details about checking and savings accounts.
Mutual funds are performing well this year, with more than half of large-cap mutual funds outpacing their benchmark so far in 2021, Goldman Sachs said in a note released Friday. That’s well above the 10-year average of 33% of funds outperforming and on pace for the highest rate in more than a decade, according to Goldman.
Federal Reserve Governor Lael Brainard pressed the case for a digital dollar, saying Monday that a cryptocurrency backed by the central bank could provide a variety of benefits. Providing financial services to the nearly 1 in 5 Americans considered “underbanked” is one of the advantages Brainard cited in a speech to a conference presented by Coindesk.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
Singapore REITs Monthly – Rolling with the punches
Recommendation: OVERWEIGHT (Maintained), Analyst: Natalie Ong
– All nine REITs under our coverage performed in line in 1Q21.
– REITs traded down after Singapore tightened COVID-19 measures. This and a 20bp dip in 10YSGS lifted dividend yield spreads to 274bps, back to -1SD. Healthcare the only sub-sector in the green (+1.2%). Hospitality REITs fared the worst, down 6.9%.
– Remain OVERWEIGHT with selective preferences. Catalysts expected from pick-up in economy and resumption of DPU growth. REITS under our coverage expected to deliver FY21e DPU yields of 3.6-8.8%. Prefer Industrial and Retail. Top picks are Manulife US REIT (MUST SP, BUY, TP US$0.84) and Ascendas REIT (AREIT SP, BUY, TP S$3.64).
HK Reports – Read up on our Hong Kong reports here
Webinar Of The Week
Date: 24 May 2021
Updates summarised in 3 minutes
|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.|
|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.|