Daily Morning Note – 28 November 2018


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Stocks bounced back from early losses to close higher Tuesday. Gains in so-called defensive sectors helped to offset anxieties that a near-term resolution to trade tensions between the U.S. and China remain elusive. (DJIA +0.4%; SPX +0.3%; COMP +0.01%)

Apple Inc. shares dropped 0.2% after President Donald Trump said during The Wall Street Journal interview that tariffs could also be placed on iPhones and laptop computers imported from China if the U.S. decides to put tariffs on additional goods.

President Trump and China’s Xi Jinping will meet over dinner Saturday evening in Buenos Aires, marking a pivotal moment in the escalating trade war between the world’s two largest economies.

South Korea has profited so much from the explosion in demand for semiconductors that its economy is now vulnerable to any downturn in the market for these tiny electronic components. They now account for more than 21 percent of exports and two-thirds of earnings at Korea’s biggest company, Samsung Electronics Co. The firm is the nation’s largest private employer and its revenue is equivalent to 15 percent of annual economic output.

Source: Marketwatch, Bloomberg


Thai Beverage PLC – A hangover from every beverage

Recommendation: Reduce (Maintained), Last Close Price: S$0.63

Target Price: S$0.57 (previous S$0.62), Analyst: Paul Chew

– 4Q18 revenue and net profit were below expectations by 17% and 38%. Spirits
volume collapsed and beer business swung into a net loss in weighted down by
falling revenues and surging interest expense.

– Maintain REDUCE with lower SOTP-derived TP of S$0.57 (previously S$0.62) as
we trim our FY19e earnings by 7%.


President Donald Trump and China’s Xi Jinping will meet over dinner Saturday evening in Buenos Aires, marking a pivotal moment in the escalating trade war between the world’s two largest economies.

Federal Reserve officials are moving into a more unpredictable phase of policy-making after two years of removing economic stimulus in regular, quarterly intervals.

Federal Reserve Vice Chairman Richard Clarida said the central bank’s gradual approach to interest-rate hikes is appropriate as U.S. monetary policy gets closer to its optimal longer-run setting.

Oil prices dipped on Tuesday, weighed down by uncertainty over the US-China trade war and signs of increased global crude production, but losses were limited by expectations that crude exporters would agree to cut output at an upcoming Opec meeting.

Mainboard-listed yarn supplier China Gaoxian Fibre Fabric Holdings announced on Tuesday night that its wholly owned subsidiary Zhejiang Huagang Polyester Industrial Co will lease out hostel units and part of its production plant in Zhejiang Province for a total annual rent income of 4.9 million yuan (S$971,354).

Source: CNBC, Bloomberg, Reuters, The Business Times, Phillip Securities Research

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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