Daily Morning Note – 27 August 2021

Dear valued client,

Asian stocks are set for a cautious start Friday as traders weigh hawkish Federal Reserve comments ahead of the Jackson Hole symposium and geopolitical tension following blasts in Afghanistan.

Futures were steady for Japan and Hong Kong but lower for Australia. U.S. contracts inched higher. The S&P 500 fell from a record overnight, in part as some Fed officials said the time to start tapering stimulus is near. Meanwhile, President Joe Biden vowed retaliation for deadly blasts outside Kabul airport that stoked tension as the U.S. evacuates the area. The dollar held a climb.

Treasury yields edged higher. Traders are awaiting Chair Jerome Powell’s speech at the symposium for clues on how the Fed might pare bond purchases. A flood of Treasury options set to expire Friday raise the prospect for volatility in the wake of his remarks.

BREAKING NEWS

SG News

Property developer GuocoLand has posted a 48 per cent year-on-year increase in net profit to S$169.1 million for the full year ended June, despite a 9 per cent fall in revenue. Revenue stood for FY21 at S$843.7 million, down from S$934.8 million a year ago, going by the interim financial statements released by the mainboard-listed company on Thursday. This was partly due to lower progressive recognition of sales year on year from its Singapore residential projects, as sales and construction of its Martin Modern project in River Valley reached its tail end and other projects were still in early stages of construction, GuocoLand said.

Property and retail player Wing Tai Holdings has reported a net profit of S$43.6 million for the full year ended June 30, a 173 per cent jump compared with its previous financial year. This came despite a net loss of S$13.2 million for the first six months of 2021. For the same half-year period in 2020, net loss amounted to S$16.8 million, according to the mainboard-listed company’s full-year financial statement released on Thursday. Its revenue for the full year rose 24 per cent to S$461.4 million, with H1 reporting a 16 per cent increase in revenue to S$218 million. Wing Tai said the increase in revenue is mainly due to higher contribution from its development properties.

Malaysian glovemaker Top Glove Corp plans to renew its lapsed application to list in Hong Kong and pursue a dual primary listing, a stock market filing showed on Thursday. Its plans were delayed, sources told Reuters in June, as Top Glove sought to resolve a US import ban on its products because of forced labour practices that had spooked investors and bankers. Top Glove said it has resolved any forced labour issues in its operations and said in June that it has been waiting for US customs authorities to verify remedial action taken on workers’ recruitment fees. The world’s largest glovemaker’s stock market filing on Thursday said it “intends to renew the HKEX listing application as soon as practicable”.

Hospital operator IHH Healthcare Berhad has posted a net profit of RM858.9 million (S$276.9 million) for the first half of 2021, swinging from a loss of RM440.4 million for the corresponding period last year. For its second quarter ended June 30, net profit stood at RM483.3 million, compared with a loss of RM120.6 million in the year-ago quarter. IHH’s revenue for H1 rose 34 per cent to RM8.2 billion from the low base of FY2020, when lockdowns across the region hit its performance, the mainboard-listed company said. For Q2 alone, its revenue was RM4.27 million, compared with RM2.57 million in Q2 last year.

Property developer Oxley Holdings has posted a net profit of S$49.5 million for the full year ended June 30, reversing from a loss of S$275.1 million in the previous year. The company’s revenue jumped 58 per cent to S$781.9 million in the first six months of 2021, bringing full-year revenue to S$1.4 billion – a 33 per cent increase compared with the preceding financial year, according to Oxley’s interim financial statements. This was mainly due to higher revenue from its projects in Cambodia, Singapore and Ireland, which partially offset lower revenue from its project in the United Kingdom, the mainboard-listed company said. Earnings per share stood at 0.31 cent, compared with a loss per share of 6.71 cents in FY2020.

Listed companies in Singapore could be required to make mandatory climate-related disclosures and provide details on their board diversity policy in the coming years, with changes to listing rules proposed by Singapore Exchange Regulation (SGX RegCo). Issuers would also need to subject their sustainability reports to assurance in future, and all directors could also be required to attend a one-time training on sustainability. These were among proposals set out in two consultation papers on Thursday as SGX RegCo looks to enhance its sustainability reporting regime amid a growing focus on environmental, social and governance (ESG) factors worldwide.


US News

Google parent Alphabet is edging toward a major milestone, looking to join the $2 trillion market cap club alongside Apple and Microsoft. The stock also hit a record high on Thursday for a fourth day in a row. But, after it surged more than 60% this year, Miller Tabak chief market strategist Matt Maley has a warning. “It is getting very overbought,” he told CNBC’s “Trading Nation” on Thursday. “Even the best companies, their stocks get ahead of themselves on a short-term basis.” Alphabet is by far the best performer among the high-growth FAANG stocks in 2021, nearly doubling the gains of the second-best performer, Facebook. “The weekly RSI is now pushing 85. That’s the most overbought it has ever been. And not only that, if you look at its 200-week moving average, it’s at almost a 98% premium to its 200-week moving average. The next closest is 76%, so it is very, very extended here on a short-term basis,” said Maley.

Salesforce shares rose as much as 3% in extended trading on Wednesday after the enterprise software maker reported fiscal second-quarter earnings and forward guidance that exceeded analysts’ estimates. Revenue increased 23% year over year in the quarter, which ended July 31, the company said in a statement. In the prior quarter revenue grew 23%. Salesforce’s Platform and Other unit, which includes the MuleSoft integration software and Tableau data-analytics software, delivered $1.88 billion in revenue, which was up 24%. The Service Cloud segment posted $1.60 billion in revenue, representing about 23% growth. Salesforce’s core Sales Cloud product, which salespeople use to stay on top of business opportunities, had $1.48 billion in revenue, up 15%.

Ulta Beauty shares rose more than 5% in extended trading on Wednesday after the company reported fiscal second-quarter sales jumped more than 60% as shoppers rushed in to restock their makeup bags. Ulta raised its full-year outlook after seeing the return of customer demand for beauty products at a faster pace than expected. “This performance reflects the recovery of the beauty category, investments and choices we’ve made over the last year to adapt to the market disruption and strengthen our leadership position, and the ongoing efforts of our associates to deliver great experiences for our guests,” said CEO Dave Kimbell.

Microsoft has hired Amazon cloud executive Charlie Bell as a corporate vice president, CNBC has confirmed. The move represents a victory for Microsoft, whose Azure cloud business is trying to take share from market-leading Amazon Web Services. Bell was considered a candidate to become head of AWS once Amazon chose Andy Jassy, the AWS CEO, to lead all of Amazon. Bell belonged to Amazon’s S-team of top leaders, and his responsibilities as a senior vice president included pricing, software development service operations and financial results, CNBC reported earlier this month as Bell left Amazon.

Peloton said Thursday its fiscal fourth-quarter loss widened as the pace of revenue growth slowed dramatically and costs associated with a treadmill recall mounted. Shares were down about 6% in extended trading on the news, after initially falling as much as 15%. Peloton warned that its earnings will be hurt in the near term because it’s slashing the price of its original Bike machine by about 20%. It’s also beginning to shift its business mix back toward treadmill sales, which are less profitable than those of its cycles.

Ford Motor is once again cutting production of its highly profitable F-150 pickup truck and two other vehicles next week due to the ongoing global shortage of semiconductor chips. The automaker on Thursday confirmed its Oakville Assembly Plant in Canada and Kansas City Assembly Plant in Missouri will be down the week of Aug. 30. Oakville builds the Ford Edge and Lincoln Nautilus crossovers. Kansas City assembles the F-150. Ford also will cut two of three shifts next week at its Dearborn Truck Plant in Michigan, which produces the F-150.


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

HK Reports – Read up on our Hong Kong reports here

Webinar Of The Week

Weekly Market Outlook: Manulife, HRnetGroup, SembCorp, Innotek, ComfortDelgro, Singtel, Q&M…..

Date: 23 Aug 2021

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.

 

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you

IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com