Daily Morning Note – 26 January 2022

Welcome to our Daily Morning Note from our Research team!

PHILLIP SUMMARY

U.S. equity futures wavered and Asian stocks looked set for a muted open after another volatile Wall Street session ahead of a Federal Reserve policy decision that’s expected to signal a March interest-rate liftoff.

U.S. contracts initially dropped early in Asia Wednesday before paring losses. Futures were steady for Japan and higher for Hong Kong. The S&P 500 erased a near-3% intraday slide Tuesday but subsequently fell again to close at the lowest since October, while the technology-heavy Nasdaq 100 underperformed.

Microsoft Corp. stoked worries about the tech outlook. The firm’s shares and the Invesco QQQ Trust Series 1 — an ETF that tracks the Nasdaq 100 — slid in extended trading after Microsoft reported slowing cloud-services revenue.

The benchmark U.S. 10-year Treasury yield was little changed ahead of the Fed, while the dollar was mixed against major peers. Crude oil held a rally, in part on the risk that a Russia-Ukraine conflict could disrupt supplies.

Stocks to watch: Frasers Centrepoint Trust


BREAKING NEWS

SG

The manager of Frasers Centrepoint Trust on Tuesday (Jan 25) reported that committed occupancy for the retail portfolio was stable at 97.2 per cent in Q1 FY2022 ended December, on the back of new retail concepts and brands introduced to refresh shopper experience and ensure sustainable trading. In a business update after market close, FCT’s manager said the trust showed a “resilient performance” despite the continuing impact from the Covid-19 pandemic. There was also still healthy demand for retail spaces within FCT’s well-located and dominant suburban retail malls in Q1. The manager attributed a 20.1 percentage point decline in occupancy in Central Plaza from end-September to end-December last year primarily to the exit of an anchor tenant. The trust is exploring opportunities for the reconfiguration of anchor space. Meanwhile, proactive leasing management at Century Square, Changi City Point and White Sands is focused partly on tenant re-mixing and space re-sizing, said the manager.

Starhill Global Reit on Tuesday (Jan 25) posted a distribution per unit (DPU) of S$0.0178 for the first half of the fiscal year FY2021/22 ended Dec 31, 2021, up 2.3 per cent from a DPU of S$0.0174 in the corresponding year-ago period. This excludes the release of S$3.1 million or S$0.0014 per unit from the Reit’s FY19/20 deferred distributable income for the H1 FY20/21 distribution. Including the effects of the deferred amount, DPU was down 5.3 per cent from S$0.0188 on a year-on-year basis. Unitholders can expect to receive their H1 FY21/22 DPU on Mar 23, with the record date on Feb 4.

Mapletree Industrial Trust’s (MIT) third-quarter distribution per unit (DPU) rose from 3.28 Singapore cents a year ago to 3.49 cents on an enlarged unit base, which resulted from the equity fundraising exercise in Q1. Income distributable to unitholders grew 10.4 per cent to S$89.5 million for the 3 months to Dec 31, following a boost in revenue from assets in the US. Net property income climbed 24.1 per cent to S$122.7 million as gross revenue rose 31.3 per cent to S$162.4 million. The increase was largely due to revenue contribution from 29 data centres in the US acquired for US$1.32 billion in July 2021, and a data centre in Richmond, Virginia acquired in Q4 FY2021.

UOB has injected 2 billion yuan (S$424.8 million) in its subsidiary in China, which will be channelled into regional opportunities, sustainability and financial solutions such as hedging services. UOB China has maintained a compound annual revenue growth of 13 per cent since it was incorporated in 2008, UOB said in a statement. Net profit before tax hit a record high last year and more than doubled from 2018. Tapping on the demand for Chinese companies to expand to Asean and vice versa, UOB China plans to establish and expand client relations in sectors that are strong drivers of China’s economy. It will also strengthen its strategic partnership with Hengfeng Bank by tapping crossborder business opportunities.

US

The dollar rose to a two-week peak on Tuesday, as tensions between Russia and the West over Ukraine drew investors to safe-haven currencies while awaiting the outcome of this week’s US Federal Reserve policy meeting. Russia said it was watching with great concern after the United States put 8,500 troops on alert to deploy to Europe in the event of an escalation in the Ukraine crisis. “Much greater exposure of European economies to the crisis does not make the euro a particularly attractive vehicle to ride out the current storm,” ING analysts said. The euro was down 0.4 per cent at US$1.1281 by 11.21 am (7.21 pm Singapore time) for its weakest level since Jan 5. The dollar index rose 0.3 per cent to a two-week high of 96.19.

The International Monetary Fund (IMF) lowered its economic forecasts for the United States, China and the global economy on Tuesday (Jan 25), and said uncertainty about the pandemic, inflation, supply disruptions and US monetary tightening posed further risks. “We project global growth this year at 4.4 per cent, 0.5 percentage point lower than previously forecast, mainly because of downgrades for the United States and China,” Gita Gopinath, the IMF’s No 2 official, wrote in a blog on the latest update of the World Economic Outlook. The IMF said the rapid spread of the Omicron variant had led to renewed mobility restrictions in many countries and increased labour shortages, while supply disruptions were fuelling inflation.

Robinhood Markets Inc on Tuesday highlighted steps it had taken over the past year to avoid imposing trading restrictions and said it was in a “strong position” to support customers through unlikely market events. The online trading platform, which helped pioneer commission-free trading, said in a blog post its net capital position was US$2.7 billion, more than twenty-five times what is currently required by the US Securities and Exchange Commission (SEC). Robinhood, in January 2021, had enacted temporary limits on GameStop and other so-called “meme stocks” amid a social media-fueled rally.

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

Lian Beng Group Ltd – Property development supports bottom line

Recommendation: N.A.; Last Done: S$0.51

TP: N.A.; Analyst: Vivian Ye
– Higher construction revenue with resumption of activities but weighed down by higher costs.

– Bottom line is still supported mostly by property development sector.

POEMS Podcast: Let the Money Talk

Recent Podcasts:

Cash is King During Festive Period
Daily Morning Note – 25 January, 2022

Introduction of Chinese New year & The Year of Tiger Zodiac

Visit www.stocksbnb.com to learn more!


Join our Phillip Securities Research Telegram channel for the latest update on our stock coverage!

Click here to join: https://t.me/stocksbnb


Webinar Of The Week

Weekly Market Outlook: Fortress Minerals, GSS Energy, Olam Intl, TOTM Technologies, SG Banking….

Date: 24 January 2022

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.