Daily Morning Note – 28 March 2019


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All Brexit models have been rejected and the British voted on eight alternatives to Prime Minister Theresa May’s Brexit deal. The pound retreated, with the pound-to-euro rate dropping -0.15% following the parliamentary results.

Asian stocks looked set to open lower after U.S. stocks fell on concerns about the global economic outlook. Treasury 10-year yields declined to the lowest level since December 2017, and rates on benchmark German bunds sank further below zero after European Central Bank President Mario Draghi said an accommodative stance is still needed.


US Strategy – Equities rally despite yield curve inversion

Analyst: Edmund Xue

– Equity market still rallies for an average of 22 months after the first inversion of the 10-year –
3-month yield curve (3m10y).

– On average, it took 22 months after the first inversion before a recession occurs.

– Our Phillip Recession Indicators, along with the corporate credit spread are still at healthy


The United States and China open the latest round of their trade talks on Thursday as the economic superpowers edge towards a deal to resolve a months-long spat that has rattled the global economy.

British Prime Minister Theresa May offered on Wednesday to quit if her European Union divorce deal passes at the third attempt, making a last-ditch sacrifice to try to win over dozens of rebels within her Conservative party.

Embattled aviation giant Boeing pledged on Wednesday to do all it can to prevent crashes like the two that killed nearly 350 people in recent months, as it unveiled a fix to the flight software of its grounded 737 Max aircraft.

Singapore Airlines’ S$500 million 3.03 per cent five-year bonds have been upsized to S$750 million following strong demand from investors.

ST Engineering announced on Wednesday that it has entered into a conditional share purchase agreement to acquire 100 per cent ownership of Belgium-based satellite telecommunications firm Newtec Group for 250 million euros (S$381 million) in cash.

Singapore Exchange has acquired a 20 per cent stake in BidFX to expand its FOREX pillar, including an option for additional shares to gain a controlling interest, for US$25 million in cash.

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

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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