Daily Morning Note – 27 May 2019


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Stocks rose on Friday, but notched weekly losses as investors worried the U.S.-China trade war is hurting economic growth. The Dow Jones Industrial Average ended the day up 95.22 points at 25,585.69 while the S&P 500 climbed 0.1% to 2,826.06. The Nasdaq Composite rose 0.1% at 7,637.01.

U.S. President Donald Trump and his Japanese counterpart Shinzo Abe sit down Monday in an attempt to resolve tensions over trade and defense ties. In India, Prime Minister Narendra Modi and his Bharatiya Janata Party clinched a landslide re-election victory. On Friday, the Nifty 50 was up 0.77% while the Sensex added 0.78%.


China National Offshore Oil Corporation

Current Sentiment: RANGING MARKET

CNOOC Ltd has been on a corrective down turn at the star of the 2nd Quarter 2019 and there are two things a play base on the technical readings of the chart. 1st, the market on last Friday close above the support of 13.08, which is the previous 2 support at play as well and therefore, we believe that the market will have a slight bullish recovery at least till the 1st resistance level.


Frasers Centrepoint Trust – A watertight deal

NEUTRAL (maintained); TP: S$2.36 (prev. S$2.31), Last close: S$2.42, Analyst: Tara

– FCT proposed an acquisition of a 33.33% interest in Waterway Point from its

– Equity fund raising of 184mn new units totaling S$437.4mn (S$369.6mn private
placement and S$67.8mn pro-rata non-renounceable preferential offering) at
S$2.382 and S$2.350 per new unit, respectively.

– WWP has an NPI yield of 4.1% and is expected to contribute c.16.5% of the
total return (on a pro-forma basis) of FCT’s enlarged portfolio, diversifying FCT’s
earnings base.

– We expect FY19e/FY20e DPU to rise 0.4% and 2.2%, respectively.

– Maintain NEUTRAL with higher TP of S$2.36 (prev. S$2.31).

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UK’s Brexit Party set for sweeping victory in EU vote. Anti-EU populist Nigel Farage’s Brexit Party looked set to triumph Sunday and the ruling Conservatives endure a historic blow in European Parliament elections in which Britain was never meant to vote.

Stocks to watch: CapitaLand, KLW Holdings, AEI Corp, Clearbridge Health.

Fiat Chrysler set to propose merger with Renault for world’s 3rd-largest automaker. Fiat Chrysler is planning to propose a merger with French carmaker Renault on Monday, according to two people involved in the negotiations, in a transaction that could reshape the global automobile industry.

Tokyo’s benchmark Nikkei index edged up at the open on Monday as investors awaited US-Japan summit talks later on the day. The key Nikkei 225 index was up 0.03 per cent, or 5.97 points, at 21,123.19 in early trade, while the broader Topix index was down 0.04 per cent, or 0.66 point, at 1,540.55.

iPhone assembler Hon Hai sees potential change of client orders due to trade war. Key iPhone assembler Hon Hai Precision Industry said it may see changes in orders amid the trade war, though it expects the impact on the company’s overall business to be “limited”.

South Koreans buying foreign stocks hammer Asia’s worst currency. As if South Korea’s won doesn’t have enough to worry about, a stampede in local investors towards overseas assets is threatening further losses in Asia’s worst-performing currency.

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

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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