Daily Morning Note – 28 May 2019


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Shares in Asia were set to rise at the open on Tuesday, with U.S. President Donald Trump continuing his visit to Japan. Futures pointed to a higher open in Japan. The Nikkei futures contract in Chicago was at 21,220, as compared to the benchmark Nikkei 225′s last close at 21,182.58.

However, the U.S. isn’t ready to make a trade deal with China as Trump said commented during his state visit to Japan, “I think they probably wish they made the deal that they had on the table before they tried to renegotiate it. They would like to make a deal. We’re not ready to make a deal.” Gold prices touched a more than one-week high on Monday as fears of a protracted U.S.-China trade war hurt risk sentiment, while poor economic data from the United States bolstered bets of a U.S. Federal Reserve rate cut. Spot gold edged 0.1% higher to $1,286.21 per ounce as of 0714 GMT.



Current Sentiment: BULLISH

SATS has finally completed a full round of a minutte wave count of the Elliott wave and it is resuming its bull after a correction. Base on technical factors presented, the market will most likely carry on its bullish rally.


China Banking Sector – Robust asset fundamentals and increasing capital inflow

Analyst: Jieyuan Zheng

– We are overweight on China Banking sector. Average dividend yield remains
around 5%.

– With required reserve ratio cut and perpetual bond issuing, the China banking
sector’s capital and liquidity continue to increase;

– We are OVERWEIGHT on the China Banking Sector. We believe the sector’s
robust capital and the increasing capital inflow will provide further upsides to

U.S. Internet – Multiple growth opportunities ahead

Analyst: Edmund Xue

– Grocery and pharmacy represent a combined $900bn TAM opportunity for

– AWS will continue to experience stellar growth with the hybrid cloud market
growing 23% CAGR to US$92bn by 2021.

– Instagram Stories will drive volume growth for FB with 3M advertisers (vs 2M
last quarter). The new Checkout function for Instagram may add US$3bn
revenue for FB in 2021.

– Google Maps represent a unique opportunity for local ads with 154M monthly
active users. Google Cloud will be the best bet as Google seeks to aggressively
expand its headcount and infrastructure for cloud.

Read more research reports


Ascendas-Singbridge Group (ASB), which is being acquired by CapitaLand, is developing a co-innovation lab to support at least 30 projects in smart urban solutions. It is slated to be launched later this year within Singapore Science Park. The Smart Urban Co-Innovation Lab, which is supported by the Infocomm Media Development Authority (IMDA) and Enterprise Singapore, will focus on the key areas of intelligent estates, smart mobility, digital wellness, and agritech.

Anti-EU populist Nigel Farage’s Brexit Party won 31.6 per cent of the vote in the European Parliament elections, final results showed on Monday, giving it 29 seats. The pro-European Liberal Democrats won 20.3 per cent, the main opposition Labour Party won 14.1 per cent, the Greens 12.1 per cent, and Prime Minister Theresa May’s Conservatives 9.1 per cent, their worst result in a national vote in nearly 200 years.

The new committee, led by CapitaLand group CEO Lee Chee Koon, will include several C-suite executives from Ascendas-Singbridge, the company said in a regulatory filing on Monday morning before the market opened. CapitaLand’s acquisition of Ascendas-Singbridge, meanwhile, is on track for completion by end-June this year. It will propel the company into one of Asia’s largest diversified real estate groups with over S$123 billion of assets under management.

Mainboard-Listed China Everbright Water has secured the second phase of an industrial waste water project worth an investment of 859.4 million yuan (S$171.3 million) in the Pukou Economic Development Zone of Nanjing City, Jiangsu Province, China.

A major Chinese chipmaker surged in Hong Kong amid prospects that its decision to stop trading in New York will attract more volume to its main listing. Shanghai-based SMIC, whose big-gest customer is the parent of Huawei Technologies Co, the high-profile subject of a US ban, was among the top gainers on the MSCI China Index with a 10 per cent rally on Monday.

Media company UnUsUaL on Monday posted a 31.7 per cent jump year-on-year in net profit to S$13.19 million for the financial year ended March 31, 2019. Revenue rose 22.6 per cent to S$56.93 million in FY2019 on the back of higher revenue contributions from its promotion revenue and others revenue segments.

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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