Daily Morning Note – 26 October 2021

PHILLIP SUMMARY

While the Dow and S&P hit new highs, the Nasdaq outperformed on the day, buoyed by gains in Tesla and PayPal.
The Dow Industrials and S&P 500 closed at record highs on Monday (Oct 25), as earnings season kicked into high gear in one of the heaviest reporting weeks of the quarter with bellwethers in multiple sectors poised to announce results.

While the Dow and S&P hit new highs, the Nasdaq outperformed on the day, buoyed by gains in Tesla and PayPal, and the tech-heavy index stands less than 1% away from its Sept 7 closing record.

Tesla Inc jumped 12.66% to its own new high of $1,045.02 and breached $1 trillion in market capitalisation, after car rental firm Hertz placed an order for 100,000 Tesla cars


BREAKING NEWS

SG

Manager of Mapletree Logistics Trust (MLT) on Monday said total acquisition value for the FY21/22 ended March 2022 is expected to be “substantial” as the real estate investment trust (Reit) seeks to continue to fuel its growth. “Last year, we did acquisitions of about S$1.6 billion. This year, hopefully, we can still do something around that range,” said Ng Kiat, chief executive officer of the manager, at a briefing following the release of its Q2 results after market close on Monday. Apart from assets in China, Vietnam and Malaysia from its sponsor’s pipeline, Ng said the Reit is also looking to acquire properties in Japan, Australia and Korea.

14 shareholders of strife-hit ecoWise Holdings have called for yet another extraordinary general meeting (EGM) of the company to remove its deputy CEO Cao Shixuan after a previous attempt to hold an EGM for the same purpose was brought to an end by a High Court injunction. In a notice sent to ecoWise dated Oct 22 by the EGM requisitionists and seen by The Business Times, the shareholders – which hold over 118 million ecoWise shares or approximately 12.5 per cent of the total number of paid-up shares of the company – have called for the EGM to be held on Nov 26, no later than 28 days from the date of the notice.

Keppel Data Centre (DC) real estate investment trust (Reit) on Monday posted a distribution per unit (DPU) of S$0.02462 for its third quarter ended Sep 30, 2021, up 4.5 per cent from the S$0.02357 it posted a year ago. The Reit’s manager attributed the increase in DPU to contributions from DPU accretive acquisitions and asset enhancement initiative (AEI) works that it has embarked on. These include the acquisition of the Eindhoven Campus in the Netherlands for 37.2 million euros (S$58.2 million) in Sep 2021, which has two data centre buildings. Gross revenue was also up 2.5 per cent to S$69.3 million for the quarter, from S$67.7 million the previous year.

Singtel said its cyber security arm Trustwave has divested SecureTrust to Sysnet Global Solutions. Singtel on Monday (Oct 25) announced that its cyber security arm Trustwave has divested SecureTrust, its payment card industry compliance business, to Sysnet Global Solutions, for a cash consideration of US$80 million (S$107.8 million). In a bourse filing the same day, the telco highlighted that the sale comes as part of Singtel’s strategic review of its digital businesses announced in May to optimise the group’s resource allocation and reposition these assets for growth.


US

US Treasury Secretary Janet Yellen said it’s “utterly essential” to raise the US debt ceiling.
United States Treasury Secretary Janet Yellen said she expects price increases to remain high through the first half of 2022, but rejected criticism that the US risks losing control of inflation. Inflation is expected to ease in the second half of the year as issues ranging from supply bottlenecks, a tight US labour market and other factors arising from the pandemic improve, Dr Yellen said in CNN’s State of the Union Address on Sunday (Oct 24). The current situation reflects “temporary” pain, she said.

Oil prices climbed on Monday (Oct 25), extending pre-weekend gains to hit multi-year highs as global supply remained tight amid solid demand as economies pick up from pandemic-induced slumps. US West Texas Intermediate (WTI) crude futures rose 62 cents, or 0.7 per cent, to US$84.38 a barrel at 0646 GMT, after gaining 1.5 per cent last Friday. They touched their highest since October 2014 – US$84.76 – earlier in the session. Brent crude futures increased 56 cents, or 0.7 per cent, to US$86.09 a barrel, following on from last Friday’s 1.1 per cent gain. The contract earlier hit its highest since October 2018 of US$86.43.

Video game developer Roblox Corp is selling US$1 billion of junk bonds, becoming the latest debut high-yield borrower in a year full of them. The company is looking to sell 8.5-year senior unsecured notes to yield in a high-3 per cent range, said a person familiar with the transaction. After talking to investors about the deal Monday morning, it is scheduled to price Tuesday, said the source, who asked not to be identified as the details are private.

Tesla zooms past US$1 trillion market cap on bet that the EV future is now. Hertz customers can rent a Tesla starting in November and the company will have 3,000 chargers in 65 markets by the end of 2022. Tesla shares closed up 12.7% at US$1,024.86.PHOTO: AFP Tesla Inc surpassed US$1 trillion (S$1.35 trillion) in market value on Monday (Oct 25) after landing its biggest-ever order from rental car company Hertz, a deal that reinforced the electric car leader’s ambitions to top the entire auto industry in sales over the next decade.


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

Technical Pulse: Costco Shipping Holdings Co ltd

Recommended: Technical BUY; Analyst: Chua Wei Ren

Costco Shipping Holdings (HKEX: 1919) technical price action sees a potential rebound to the upside after a corrective downside has found a bottom after technical indicate a potential upside

Buy spot: 11.86 Stop loss: 9.40 Take profit 1: 13.67 Take profit 2 : 16.20

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