Daily Morning Note – 26 September 2018

WEEKLY MARKET OUTLOOK WEBINAR

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YOUR PHILLIP SUMMARY

U.S. stocks finished mostly lower Tuesday amid subdued activity as investors limited big bets ahead of the Federal Reserve’s monetary-policy decision on Wednesday. Concerns about continuing trade tensions lingered, further capping the market’s upside momentum.

The Dow Jones Industrial Average fell 69.84 points, or 0.3%, to 26,492.21 and the S&P 500 index shed 3.81 points, or 0.1%, to 2,915.56. The Nasdaq Composite Index gained 14.22 points, or 0.2%, to 8,007.47, logging its second consecutive positive session.

The key event to look out for is today’s policy decision by the Fed, which is widely expected to result in a 25 basis point interest-rate increase. The meeting will be followed by Fed Chairman Jerome Powell’s news conference during which investors are expected to seek further insight into the state of the economy, the impact of trade issues, and the path of future rate moves.


Source: MarketWatch.com

RESEARCH REPORT

United Overseas Bank Limited – Loans growth intact and least affected by trade war

Recommendation: BUY (Maintained), Last Done Price: S$27.01

Target Price: S$33.69, Analyst: Tin Min Ying

– In near-term, loans growth not expected to be affected by trade war and
property cooling measures. High single-digit loans growth target for FY18
remains reasonable.

– Rising interest rate unlikely to have a significant impact on credit quality but
cost of funds is expected to increase in tandem.

– Operating costs is expected to stay elevated with investments in technology
for business expansion.

– We raise our dividend forecast to S$1.19 per share in favour of a 50% pay-out
ratio.

– Maintain BUY with target price of S$33.70 (previous TP S$34.50) based on
Gordon Growth Model.


TECHNICAL PULSE

Starhub Ltd – Daily timeframe – Bullish

– A bullish breakout finally happened on 25/09/18 with price breaking significantly
above the 1.75 range high signals a shift in sentiment to the bullish side.

– Expect price to bottom out and reverse higher next to test the 1.91 resistance
area followed by 2.09.


For more information and additional disclosures, refer to the link here.

BREAKING NEWS

The US Federal Reserve began a two-day policy meeting on Tuesday, with markets overwhelmingly expecting the third rate hike of the year as inflation mounts and the economy grows.

Oil prices rose Tuesday on global supply concerns following US sanctions on Iran’s oil exports, with benchmark Brent surging to a four-year high, then retraced gains to settle just slightly higher after US President Donald Trump called again on Opec to boost crude output.

Leading internet search engine Google will acknowledge that it has made “mistakes” on privacy issues in testimony an executive of the Alphabet Inc unit will deliver to a US Senate committee on Wednesday, according to a document reviewed by Reuters.

A subsidiary of Sasseur Reit is being sued in China over a disagreement of the final construction sum payable in respect of Sasseur (Hefei) outlets which was completed in May 2016.

Mainboard-listed Sapphire Corporation Ltd, an integrated infrastructure design and construction group in China, has secured a 64 million yuan (S$12.7 million) contract for the design, engineering and construction work related to the upgrading of a water treatment facility in Chengdu, China.

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

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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