DAILY MORNING NOTE | 28 April 2023

Technical Pulse: US Semiconductors on the slide

Philadelphia PHLX Semiconductor Index (NASDAQ: SOX)

Analyst: Zane Aw

(Current Price: US$2922.99)

Resistance Zone: US$3020-3230 Support Zone: US$2440-2700

Advanced Micro Devices, Inc. (NASDAQ: AMD)

Analyst: Zane Aw

(Current Price: US$85.94)

Resistance Zone: US$88-96 Support Zone: US$72-79


Analyst: Zane Aw

(Current Price: US$609.10)

Resistance Zone: US$640-680 Support Zone: US$490-530

Applied Materials, Inc. (NASDAQ: AMAT)

Analyst: Zane Aw

(Current Price: US$110.31)

Resistance Zone: US$116-125 Support Zone: US$90-98

Singapore shares fell 0.4 per cent or 11.88 points to 3,282.03, as property counters experienced declines following the government’s property cooling measures overnight. Across the broader market, losers beat gainers 295 to 269 after 1.4 billion securities worth S$1.2 billion changed hands.

Wall Street stocks enjoyed their best session in weeks on Thursday following strong results from Facebook parent Meta, while banking shares bounced. All three major indices finished solidly higher, with the tech-rich Nasdaq Composite Index jumping 2.4 per cent to 12,142.24. The Dow Jones Industrial Average climbed 1.6 per cent to 33,826.16, while the broad-based S&P 500 gained 2.0 per cent to 4,135.35. Meta surged around 14 per cent as it reported a profit of US$5.7 billion in the first quarter – the latest favourable results by a US tech giant – prompting relief in the market following earlier fears that the sector might sputter.

Top gainers & losers





Mapletree Industrial Trust (MIT) on Thursday (Apr 27) reported its Q4 FY22/23 results with higher gross revenue and net property income. Gross revenue rose 4.3 per cent to S$171.1 million, from S$164.1 million in Q4 FY21/22. Net property income increased 3.8 per cent to S$128.9 million, from S$124.2 million. Distributable income in the quarter fell 3.5 per cent to S$87.2 million from S$90.3 million. This was due to higher borrowing costs in the quarter compared to the previous year. As a result, distribution per unit for Q4 FY22/23 also dropped 4.6 per cent to S$0.0333 from S$0.0349.

Mapletree Pan Asia Commercial Trust (MPACT) reported a distribution per unit (DPU) of 2.25 Singapore cents for the fourth quarter ended Mar 31, 2023, down 17.3 per cent from 2.72 Singapore cents in the year-ago period. The DPU figure of 2.72 Singapore cents for the year-ago period included the release of retained cash; excluding the release of retained cash, DPU in both periods remained unchanged at 2.25 Singapore cents. Gross revenue was up 85.9 per cent to S$233.3 million in the quarter, from S$125.5 million previously. Net property income (NPI), meanwhile, gained 82.2 per cent to S$177.4 million, compared with S$97.4 million in the same period a year ago.

Lippo Malls Indonesia Retail Trust (LMIRT) reported a 6.2 per cent increase in net property income to 352.1 billion rupiah (S$30.8 million) in Q1 2023 ended Mar 31, from 331.5 billion rupiah in Q1 2022. Rental revenue fell 1.9 per cent to 317.1 billion rupiah in this quarter from 323.3 billion rupiah in the year prior. But gross revenue rose 3.5 per cent to 558.6 billion rupiah in Q1 2023 from 539.7 billion rupiah in Q1 2022. In rupiah terms, the trust’s portfolio of properties reported stable operating performance on the back of improving operating conditions in Indonesia. But due to the depreciation of the Indonesian currency against the Singapore dollar, LMIRT’s reporting currency, the trust reported declines in rental revenue and net property income. Rental revenue for Q1 2023 was S$27.8 million, down 9 per cent from S$30.5 million in Q1 2022. Net property income also fell 1.4 per cent to S$30.8 million in Q1 2023 from S$31.3 million in Q1 2022.

Singtel announced on Thursday (Apr 27) that it will be combining its consumer and enterprise businesses in Singapore into a singular operating company from Jun 1, 2023. The move is part of a “strategic reset and ongoing efforts to restructure and reposition the company for growth”. The company also announced plans to form a standalone infrastructure unit, dubbed Digital InfraCo, which will include the group’s regional data centre business, subsea cable, satellite carrier businesses and Paragon platform.

City Developments Ltd (CDL) has pushed back the launch of its prime downtown project Newport Residences, which sits in the prime residential segment that analysts have said will take a direct hit from latest government cooling measures. Newport Residences, a 246-unit freehold luxury development at Anson Road, had been scheduled to start previews this weekend. Prices are said to be pitched north of S$3,000 per square foot (psf). The project is coming up on the site of the former Fuji Xerox Towers building in the Central Business District (CBD), which is in the Core Central Region (CCR). Two other luxury projects are also in the works in the CBD area – the 748-unit Marina View Residences condo on the Marina View Government Land Sales (GLS) site, developed by IOI Properties, and a 215-unit project at the former AXA Tower site on 8 Shenton Way, developed by a Perennial Holdings-led consortium.

Rents and prices of Singapore industrial space continued to rise for the tenth straight quarter in the first quarter of 2023 despite a fall in transaction volumes and occupancy rates, according to JTC’s quarterly market report released on Thursday (Apr 27). Industrial rents rose 2.8 per cent quarter on quarter and 8.8 per cent year on year. Rents were up 3 per cent in Q1 for both multiple-user factories and single-user factories. Meanwhile, warehouses and business parks saw a 2.9 per cent and 0.6 per cent increase in rents respectively. On a year-on-year basis, rents for multiple-user factories and single-user factories grew 10.5 per cent and 6.9 per cent, respectively. Warehouse rents rose 9.4 per cent and business park rents increased 2.6 per cent. Prices for industrial space gained 1.5 per cent on the quarter and 6.9 per cent on the year.


Intel reported first-quarter results on Wednesday that showed a staggering 133% annual reduction in earnings per share. Revenue dropped nearly 36% year over year to $11.7 billion. Still, the loss per share and sales were slightly better than soft Wall Street expectations. The stock fluctuated in extended trading after initially rising on the report. Loss per share was 4 cents per share, adjusted, versus 15 cents per share expected. Revenue was $11.7 billion, adjusted, versus $11.04 billion expected. For the second quarter, Intel expects to lose 4 cents per share on revenue of $12 billion. That forecast is shy of analyst expectations for earnings of 1 cent per share on $11.75 billion in sales, according to Refinitiv. In the first quarter, Intel swung to a net loss of $2.8 billion, or 66 cents per share, from a net profit of $8.1 billion, or $1.98 per share, last year.

Mastercard on Thursday (Apr 27) beat estimates for quarterly profit as travel demand held up against a turbulent economy, and bet on resilient consumer spending through the year. Rising interest rates and stubborn inflation have had little impact on wealthier consumers who continue to spend on travel and entertainment, boosting transaction volumes at payments processors. “Consumer spending has remained remarkably resilient, and that despite continued economic uncertainty,” said CEO Michael Miebach on a call with analysts, adding that while there are signs of inflation cooling, the banking sector has come under pressure. Pent-up demand from consumers also helped Mastercard, driving a 35 per cent surge in cross-border volumes – a gauge of travel demand that tracks spending on cards beyond the country of its issue.

Gross domestic product, adjusted for inflation, rose at a 1.1 per cent annual rate in the first quarter, the Commerce Department said on Thursday (Apr 27). That was down from a 2.6 per cent rate in the last three months of 2022 but nonetheless represented a third straight quarter of growth after output contracted in the first half of last year. The figures are preliminary and will be revised at least twice as more complete data becomes available. Growth in the first quarter was dragged down by weakness in housing and business investment, both of which are heavily influenced by interest rates. The Federal Reserve has raised rates by nearly five percentage points since early last year in an effort to tamp down inflation. Consumers, however, have proved resilient in the face of both rising prices and higher borrowing costs. Inflation-adjusted spending rose at a 3.7 per cent annual rate in the first quarter, up from 1 per cent in the prior period. Consumers have been buoyed by a strong job market and rising wages, which have helped offset high prices.

US pending home sales fell last month by the most since September, suggesting the housing market isn’t totally out of the woods yet. The National Association of Realtors’ (NAR) index of contract signings to purchase previously owned homes dropped 5.2 per cent in March to 78.9, according to data released on Thursday (Apr 27). The decrease was worse than all estimates in a Bloomberg survey of economists, which called for a 0.8 per cent advance. The pending home sales report is often seen as a leading indicator of existing-home sales, given homes typically go under contract a month or two before they’re sold. That said, homeowners who locked in low mortgage rates are reticent to list their properties, keeping supply of pre-owned homes constrained.

Mortgage rates in the US rose to the highest level since the middle of March. The average for a 30-year, fixed loan was 6.43 per cent, up from 6.39 per cent a week earlier, Freddie Mac said in a statement on Thursday (Apr 27). US homebuyers have been squeezed by interest rates that started to surge last year. The market is also constrained by a lack of homes for sale, as owners are reluctant to give up loans with lower rates.

Meta Platforms shares surged after the social media company reported first-quarter revenue that exceeded analysts’ estimates and signalled the beginnings of a recovery in digital advertising. First-quarter sales rose to US$28.6 billion — a return to growth after three straight quarters of declines. That compared with the US$27.7 billion average analyst projection. Shares gained more than 12 per cent in after-market trading. The company said revenue in the current quarter will be as much as US$32 billion, compared to the US$29.5 billion average estimate.

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


Frasers Centrepoint Trust – Nearly-full portfolio occupancy

Recommendation: Accumulate (Maintained), Last Done: S$2.23

Target price: S$2.35, Analyst: Darren Chan

– 1H23 DPU of 6.130 Singapore cents (-0.1% YoY) was in line and formed 51% of our FY23e forecast.

– All portfolio properties achieved higher revenue and NPI YoY, supported by higher atrium income and rent growth. Retail occupancy reached a high of 99.2%; tenant sales and shopper traffic improved 9.2% and 35.3% YoY respectively.

– Maintain ACCUMULATE, DDM TP increased from S$2.31 to S$2.35 as we raise our FY23e-FY25e DPU estimates by 1-2% on the back of higher portfolio occupancy. Current share price implies a FY23e DPU yield of 5.5%.

CapitaLand Ascott Trust – Strong Japan recovery

Recommendation: Buy (Maintained), Last Done: S$1.090

Target price: S$1.26, Analyst: Darren Chan

– No financials were provided in this business update. 1Q23 gross profit was 59% higher YoY, and 97% of 1Q19 pre-COVID-19 levels. Portfolio RevPAU spiked 90% YoY to S$127 and is at 93% of pre-pandemic 1Q19 pro forma RevPAU.

– 1Q23 effective borrowing cost at 2.4% (4Q22: 1.8%) is still lower than many of its peers.

– Maintain BUY, DDM-TP unchanged at S$1.26. CLAS remains our top pick in the sector owing to its mix of stable and growth income and geographical diversification. The current share price implies a FY23e dividend yield of 6%.

Microsoft Corp – Azure remains the primary growth engine

Recommendation: ACCUMULATE (Downgraded); TP: US$328.00

Analyst: Ambrish Shah

– 9M23 revenue/PATMI was in line with expectations at 75%/73% of our FY23e forecasts. In 3Q23, total revenue grew by 7% YoY driven by a 16% YoY rise in cloud business. PATMI was hurt by US$704mn (or 4% of 3Q23 PATMI) foreign exchange headwinds.

– Azure revenue grew 31% YoY in constant currency fueled by resilient corporate cloud-computing demand. Expects to deliver 26-27% YoY Azure revenue growth in 4Q23e.

– We downgrade to ACCUMULATE from BUY recommendation after the recent jump in its stock price. We raise our DCF target price to US$328.00 (prev. US$298.00). Our FY24e PATMI is raised by 3%. We expect growth to re-accelerate in FY24e, particularly for Azure as its client base expands and enterprises shift their workloads to the cloud.

PSR Stocks Coverage



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