Daily Morning Note – 29 April 2019

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YOUR PHILLIP SUMMARY

Shares in the Asia Pacific region traded mixed on Monday morning, while markets in Japan are closed for a holiday. The S&P 500 and Nasdaq Composite finished the previous week at record highs. The S&P 500 climbed 0.5% to 2,939.88, an all-time closing high. The Nasdaq also ended the day up 0.3% at 8,146.40, as better-than-expected economic data offset a mixed batch of corporate earnings. First-quarter gross domestic product was 3.2%, the Commerce Department said on Friday, topping the consensus economist estimate of 2.5%, according to Dow Jones. Oil prices tumbled as much as 4% on Friday, extending early losses after President Donald Trump said he told OPEC to take action to temper fuel costs. Still, U.S. West Texas Intermediate crude futures settled $1.91 lower at $63.30 per barrel, plunging 2.9% on the day and ending the week down 1.1%.



RESEARCH REPORT

Singapore Exchange Limited – Record derivatives volume to support earnings growth

Recommendation: ACCUMULATE (Maintained), Last Done price: S$7.37

Target Price: S$8.09, Analyst: Tin Min Ying

– 3Q19 revenue and net profit were in line with our estimates.

– Derivatives volume in 3Q19 surged 12% YoY, driven by China A50 futures
and iron ore derivatives. SDAV plunged 30% from a high base last year.

– Quarterly dividend per share declared at 7.5 cents, up 2.5 cents.

– We maintain Accumulate at a lower TP of S$8.09 (previously S$8.17) as we
peg our TP to 21.4x P/E, 1 SD below SGX’s 5-year mean. The lower TP is
due to higher DDAV partly offset by lower SDAV.

CapitaLand Mall Trust – Anticipating the anticipated

Maintain NEUTRAL; TP: S$2.21 (prev. S$2.09), Last: S$2.36, Analyst: Tara Wong

– 1Q19 NPI and DPU in line with our forecast.

– Stable portfolio occupancy and higher tenant retention rate.

– Funan pre-leased at 90% occupancy – on track to open in 2H2019.

– Still-weak rental reversions, dragged down by a wider mix of trade categories.
Tenant sales also slid 0.5% YoY.


BREAKING NEWS

China’s industrial profits pick up in March with 13.9% rise. Profits in March rose 13.9 per cent year-on-year to 589.52 billion yuan (S$120 billion), the National Bureau of Statistics (NBS) said on its website on Saturday, recovering from a 14 per cent fall in the first two months.

Labour costs to go up faster in 2019: MAS. Productivity growth has been on the decline – and the central bank anticipates it to come in below last year’s 2.5 per cent, especially as economic output falls in a cooler climate. Meanwhile, overall ULC should rise by around 2 per cent, against 0.5 per cent in 2018, the MAS said on Friday.

Singapore closer to becoming Asia’s debt restructuring hub. Singapore is a step closer to fulfilling its aim to become an international debt restructuring hub, akin to London or New York, after a landmark ruling by an English court to recognise the city-state’s new moratorium law for insolvency and corporate restructuring. This comes after the High Court of England and Wales last month recognised the reprieve granted by the Singapore High Court to H&C S Holdings from its creditors as the troubled iron ore trader works on its restructuring plan.

Keppel Corp ups limit of medium-term note programme to US$5b from US$3b. Offshore and marine company Keppel Corp has increased the investable limit of its multi-currency medium-term note programme to US$5 billion from US$3 billion. Net proceeds from the issue of the notes under the upsized programme will be used for general corporate or working capital purposes, the company said in a regulatory filing on Monday.

DBS Q1 profit up 9% to S$1.65b; to pay out 30 S cents per share for quarter. NIM expanded 1bps YoY to 1.88%. Loans grew by 5% YoY. Earnings per share came in at S$2.58, compared to S$2.38 previously. DBS declared a 30 Singapore cents per share dividend, consistent with the fiscal 2018’s full-year payout of S$1.20 per share.

Raffles Medical’s Q1 profit falls 13.7% on Chongqing hospital start-up costs. Raffles Medical Group on Monday morning reported a 13.7 per cent drop in its first-quarter net profit to S$13.6 million from S$15.8 million a year ago, due to start-up costs for Raffles Hospital Chongqing. The group’s revenue for the three months ended March 31 increased 6.7 per cent year on year to S$128.3 million.

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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