Daily Morning Note – 28 May 2021


The Dow pushed higher early Thursday on a rally led by Boeing and other industrial equities as US jobless claims fell to a new pandemic low. Boeing jumped more than four per cent in an advance joined by Caterpillar and Honeywell International based on expectations that the reopening of the economy will boost manufacturing. Large tech companies such as Facebook and Amazon retreated modestly. New filings for US unemployment benefits slid lower for a fourth straight week, reaching a new pandemic low of 406,000, seasonally adjusted, the Department of Labor said.


SG News

Lendlease Global Commercial Real Estate Investment Trust (Reit) has issued S$200 million in perpetual securities at 4.20 per cent per annum, for the financing of potential investment opportunities among several other uses. Lendlease Global Commercial Trust Management, the Reit’s manager, in a regulatory filing on Thursday, announced that the issuance under Lendlease Global Commercial Reit’s S$1 billion multicurrency debt-issuance programme will bear an initial rate of distribution of 4.20 per cent per annum for the first five years.

Boustead Singapore’s second-half net profit has more than quadrupled to S$91.3 million from S$18.5 million the previous year, largely due to its real estate division’s successful launch of the Boustead Industrial Fund (BIF). The real estate division (Boustead Projects) was able to unlock value when it divested interests in 14 leasehold properties out of its portfolio of 25 to the Boustead Industrial Fund (BIF).

Sats on Thursday posted a net profit of S$800,000 for the fourth quarter ended March 31, up from a net loss of S$6.3 million the previous year due to revenue growth from non-travel related businesses. This works out to an earnings per share of 0.1 Singapore cent for the quarter, compared with a loss per share of 0.6 cent the previous year. Excluding one-off impairments, the group posted a core profit after tax and minority interests (Patmi) of S$13.2 million for the fourth quarter. Without relief from governments, group Patmi would have been a loss of S$45.4 million.

Securities Investors Association (Singapore) or Sias has asked mainboard-listed Singapore Airlines (SIA) if it has considered privatisation or has such an intention. The investor watchdog has written a letter to the flag-carrier airline, posing a string of questions triggered by SIA’s recent announcement of the issuance of mandatory convertible bonds (MCBs) to raise a further S$6.2 billion. David Gerald, Sias chief executive, who penned the letter dated May 27, has asked on behalf of some shareholders whether the route of privatisation, like the one taken by land transport operator SMRT, has crossed the mind of SIA’s board. He also asked whether SIA has such a plan in mind.

Aztech Global , the technology unit of Aztech Group, on Thursday said it estimates the latest movement control order (MCO) in Malaysia to reduce its production output in that market for two weeks by 30 percent. This came after the group’s preliminary assessment on the impact of the stricter rules on its operations in Malaysia. Restrictions include requiring companies in the private sector to adhere to having 40 percent of their workforce work from home from May 25 to June 7.

US News

New filings for US unemployment benefits slid lower for a fourth straight week, reaching a new pandemic low as Covid-19 vaccines help the economy rebound, the government said Thursday. The Labor Department said 406,000 new seasonally adjusted claims for jobless benefits were made last week, 38,000 fewer than the previous week’s unrevised total and fewer than analysts had expected. The report brings the closely watched indicator of labour market strength closer to the pre-pandemic level of 256,000 seen on the week of March 14, 2020 – before the spreading coronavirus forced businesses to close and unemployment filings skyrocketed into the millions.

US Senate Republicans unveiled a new infrastructure offer on Thursday that would spend US$928 billion over eight years to revitalise America’s roads, bridges and broadband systems, still well below President Joe Biden’s last proposal. The plan, from a group of six Republicans led by Senator Shelley Moore Capito, represents their counter-offer to a week-old US$1.7 trillion White House proposal that slashed more than US$500 billion from Mr Biden’s original US$2.25 trillion plan in a bid to reach a bipartisan agreement.

Treasury Secretary Janet Yellen is asking US lawmakers for more money to run her agency and improve tax collection, citing a budget that has shrunk by as much as 20 per cent in some offices since 2016. To fight the impact of the global pandemic on the American economy, the department in the past year established programmes to distribute more than US$1 trillion in direct payments and aid to state and local governments along with American businesses and families.

Orders placed with US factories for business equipment rose in April by the most in eight months, marking yet another robust month of capital investment fuelled by a broader reopening of the economy. Core capital goods orders, a category that excludes aircraft and military hardware and is seen as a barometer of business equipment investment, increased 2.3 percent after a 1.6 percent gain a month earlier, Commerce Department figures showed Thursday.

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

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