Daily Morning Note – 26 November 2018
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YOUR PHILLIP SUMMARY
U.S. stocks closed lower Friday, pressured again by falling oil prices, which drove the indexes to weekly loses of more than 3.5%—the second straight week of declines.
The Dow Jones Industrial Average fell 178.74 points, or 0.7%, to 24,285.95, the S&P 500 index off 17.37 points, or 0.7%, at 2,632.56, while the Nasdaq Composite Index retreated 33.27 points to 6,938.98, a decline of 0.5%.
Markets were driven lower by pressure on oil. U.S. oil on Friday registered the worst day in about three years. January West Texas Intermediate crude slid $4.21, or 7.7%, to settle at $50.42 a barrel, representing the worst day since July 6 of 2015 and the lowest settlement since Oct. 9, 2017.
U.S. Treasury yields also fell Friday, following the drop in European debt yields, due to tepid economic data. The 10-year Treasury note yield gave up 1.6 basis points to 3.045%, its lowest since Sep. 17. The German 10-year bond yield fell 3.1 basis points to 0.339%. Trading in German government paper can influence yields for Treasuries as both share safe haven status among investors.
Bond yields fell across Europe after a raft of lackluster eurozone data. Germany’s gross domestic product fell by 0.2% in the third-quarter, the first negative reading since early 2015. And the eurozone composite purchasing manufacturer’s index for November slipped to 52.4, its lowest in nearly four years.
Golden Energy and Resources Ltd – Production on track but some headwinds
Recommendation: BUY(Maintained), Last Close Price: S$0.230
Target Price: S$0.360, Analyst: Chen Guangzhi
– Production surged 66% while coal prices slightly dropped.
– Multiple upward pressures on cash cost
– Bearish price outlook in the near term
Geo Energy Resources – A production miss
Recommendation: BUY (Maintained), Last Done Price: S$0.205
Target Price: S$0.245, Analyst: Chen Guangzhi
– Capital injection and coal prepayment from Macquarie Bank
– 4Q18 coal price outlook is weak
– 13mn tonnes production target for FY19
India’s government wants to discuss changes in the central bank’s governance structure at the Reserve Bank of India’s next board meeting, Economic Secretary Subhash Chandra Garg told ET Now.
Noble Group‘s US$3.5 billion restructuring has received time extensions for conditions crucial to the deal, which may now see completion pushed further till Dec 11, according to exchange filings on Sunday night.
LTC Corporation announced on Monday morning that it will go ahead with voting on its proposed delisting after receiving confirmation from the Singapore Exchange’s (SGX) regulation unit that it would be subject to existing voluntary delisting rules.
Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research
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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