Daily Morning Note – 28 January 2021

PHILLIP SUMMARY

Asian stocks looked set to slide Thursday as their U.S. peers extended losses in after-hours trading on disappointing earnings from tech giants and concerns about valuations. The dollar jumped the most since September and Treasuries climbed.

S&P 500 futures slipped as results from Apple Inc., Facebook Inc. and Tesla Inc. sent shares sliding after market. Contracts pointed lower in Japan and Hong Kong, and Australian shares retreated. Earlier, the U.S. benchmark fell 2.6% — the most since October — after Federal Reserve officials left their main interest rate unchanged and made clear the central bank was nowhere near exiting massive support for the economy. Ten-year Treasury yields fell to just over 1%.

BREAKING NEWS

Ascott Residence Trust’s (ART) distribution per stapled security (DPS) fell by 52 per cent to 1.99 Singapore cents for its half year ended Dec 31, 2020 compared to 4.18 cents a year ago, reported its managers on Wednesday morning. This brings ART’s DPS for the full year to 3.03 cents, down 60 per cent from its 2019 DPS of 7.61 cents and in line with its profit guidance issued on Jan 15.

Keppel Infrastructure Trust (KIT) on Wednesday posted a distribution per unit (DPU) of 1.86 Singapore cents for the second half of the fiscal year ended December 2020, unchanged from the corresponding period last year. This brings the trust’s DPU for FY 2020 to 3.72 Singapore cents, unchanged from FY 2019.

Keppel Pacific Oak US Reit (KORE) posted a distribution per unit (DPU) of 3.13 US cents for the second half of its fiscal year ended December, up 4 per cent from 3.01 US cents in the corresponding period last year. This lifts the Reit’s DPU for FY 2020 to 6.23 US cents, some 3.7 per cent higher than 6.01 US cents in FY2019.

In a business update, Mapletree Commercial Trust (MCT) said on Wednesday after trading hours that its year-to-date gross revenue and net property income (NPI) for FY20/21 are down 1.9 per cent and 1.2 per cent respectively on the back of Covid-19 rental rebates for eligible tenants. Year-to-date FY20/21 gross revenue stood at S$348.7 million, while NPI stood at S$275.9 million. Property operating expenses was also down 4.4 per cent to S$72.8 million in the year to date.

Supermarket operator Sheng Siong said that it expects its revenue and net profit for its fourth quarter to vary by less than 5 per cent from the figures recorded for the previous quarter, in a profit guidance after trading hours on Wednesday. This comes as demand in the fourth quarter of 2020 was stable compared with the quarter before; Covid-19 restrictions were similar, except that Phase 3 started on Dec 28, 2020, it said.

Aims Apac Reit is set to acquire Sime Darby Business Centre – a premium showroom and business-space precinct along Alexandra Road – for S$106.6 million.The total cost comprises the purchase consideration of S$102 million and transaction costs of approximately S$4.6 million.

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

TECHNICAL REPORTS

CapitaLand China Retail Trust

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

CapitaLand Retail China Trust (SGX: AU8U) has gained substantially based on our report on 11th December 2020. Recent technical indicate that we are setting up for another set of rally despite recent sell-down.

Ascott Residence Trust

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Ascott Residence Trust (SGX: HMN) has made a steady recovery and recent technical indicate that Ascott will head for further upside.

>> Read more Technical reports

RESEARCH REPORTS

Microsoft Corporation: 4 Takeaways from 2Q2021 earnings

Analyst: Yeap Jun Rong

– Continued shift in revenue mix towards its Intelligent Cloud component, driven by strong momentum in Azure

– Improving advertising and job market from positive economic outlook may continue to drive its Linkedin and Search businesses

– Segmental guidance by the management for 3Q 2021 displays continued resilience ahead

– Digital transformation trend is underway and Microsoft may be the beneficiary at the forefront of a continued digital transformation

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

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Date: 25 January 2021

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