Daily Morning Note – 28 Aug 2019
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Stocks in Asia edged up on Tuesday as investors watched closely for developments on the U.S.-China trade war following a recent escalation.
The Dow Jones Industrial Average more than erased a 155-point rally on Tuesday as a recession indicator from the bond market worsened and fears around the U.S.-China trade war weighed on equity trading.
Gold rose more than 1% on Tuesday as fears of a possible recession gripped investors following disappointing U.S. economic data and an ongoing U.S.-China trade dispute, while silver breached $18 for the first time in nearly two years.
Washington approved the US$3.3 billion sale of anti-ballistic missiles to Japan on Tuesday, following close behind a series of new ballistic missile tests by North Korea that could threaten the US ally. Japan will buy up to 73 of the Raytheon-made SM-3 Block IIA missiles, which are designed to be fired by the ship-board Aegis system to intercept incoming ballistic missiles, the Pentagon said.
New British finance minister Sajid Javid said on Tuesday he will announce an increase in public spending on health, education and the police next week, but he will stick with the budget rules drawn up by his predecessor.
The Brazilian central bank waded into the foreign exchange market on Tuesday in a rare sale of dollars on the spot market after the real slumped to its weakest level against the greenback in almost a year and within sight of its all-time low. The intervention marked the first time in 10 years that the bank had sold dollars on the spot market without using additional instruments or a commitment to repurchase.
British oil giant BP said Tuesday it will sell all of its Alaska operations for US$5.6 billion, exiting the state after 60 years to help meet divestment goals.
Global industrial gases and engineering group Linde broke ground on Tuesday for its upcoming US$1.4 billion integrated manufacturing complex in Singapore – the single largest investment in the company’s history. Slated for completion in early 2023, the complex will be located and integrated with Linde’s existing gasification facility on Jurong Island, and will quadruple Linde’s production capacity of hydrogen and synthetic gas in Singapore.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
Ping An Healthcare and Technology Co Ltd
Recommended Action: Technical SELL
Ping An Health (HK: 1833) strong bullish momentum is waning. We expect the stock to be locked within a range.
ARA Asset Management Limited – Rapidly growing real estate manager
Credit View, analyst – Timothy Ang
ARA Asset Management Limited (ARA) is a global integrated real assets fund manager. As at 30 June 2019, Gross Assets Managed by ARA Group and its Associates is more than S$83bn across over 100 cities in 23 countries.
(+) Stable income operating model
(+) Established stakeholders
(-) Depressed interest coverage ratio when including perpetual bond payments
(-) Private company, possible re-listing
CITIC Securities Co., Ltd. – Leading brokerage company in different business
Analyst: Jieyuan Zheng, Chua Wei Ren
– CITICS reported 1H19 net profit of RMB 6.4bn, up 15.8% YoY.
– 1H19 revenue of RMB 28.39bn, up 4.59% YoY, of which the securities trading revenue increased 3.76 % YoY to RMB 10.4mn.
– Overall, we are positive on CITICS due to: 1) its leading positions in asset management and investment banking business; 2) Competitive on the newly launched Kechuang board. CITICS currently trades at 0.99 P/B and 15.1 P/E.
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Date: 26 August 2019
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