Daily Morning Note – 29 July 2020

PHILLIP SUMMARY

Wall Street stocks tumbled on Tuesday following mixed earnings, and as legislators in Washington appeared far apart on another round of fiscal support for the coronavirus-battered economy.

The Dow Jones Industrial Average dropped 0.8 per cent to 27,379.28.

The broad-based S&P 500 shed 0.7 per cent to 3,218.44, while the tech-rich Nasdaq Composite Index dropped 1.3 per cent to 10,402.09.

Republican congressional leaders on Monday released details of their long-awaited spending plan to boost the economy.

BREAKING NEWS

Ascendas India Trust on Tuesday reported a higher distribution per unit (DPU) of 4.64 Singapore cents for its first half ended June 30, compared to 3.75 cents paid out a year ago. This was mainly due to the reversal of its dividend distribution tax (DDT) provision as a result of India’s abolition of the DDT policy from April 2020; other factors were the higher interest income from investments in forward purchases and modest growth in net property income, the business trust said.

Hiap Seng Engineering on Tuesday said that it has, with its subsidiary, HS Compression & Process (HSCP), filed separate applications in the High Court for orders that they be placed under judicial management (JM). The JM applications will be heard on a date to be fixed by the Court.

Starhill Global Reit on Tuesday posted a distribution per unit (DPU) of 0.7 Singapore cent for its second half ended June 30, down from the 2.2 cents paid out a year ago. Income to be distributed to unitholders fell 68 per cent to S$15.4 million, after about S$3.8 million of income available for distribution was retained for working capital needs and S$7.7 million of distributable income for the current period was deferred, as allowed under Covid-19 relief measures announced by the Inland Revenue Authority of Singapore.

Sunmoon Food Company on Tuesday posted a net loss to the tune of S$4.3 million for its fiscal year ended March 31, similar to net losses a year ago. This was on the back of revenue falling 75 per cent to S$18.4 million, from S$72.6 million a year ago, due to business restructuring during the year and its business being affected by Covid-19.

European shares closed modestly higher on Tuesday, as investors assessed a batch of mixed earnings reports while holding out for more US stimulus to limit the economic damage of Covid-19. The pan-European Stoxx 600 rose 0.4 per cent, with defensive sectors such as healthcare, food & beverage and utilities boosting the main index. Travel stocks rebounded from losses on Monday when worries of a resurgence in coronavirus cases in Europe hit risk sentiment.

The coronavirus pandemic took a bite out of McDonald’s profits and the Big Mac maker said on Tuesday it plans to focus on affordability in upcoming marketing campaigns as US consumer surveys reveal mounting recession fears.

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

TECHNICAL PULSE

Jardine Matheson Holdings Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Jardine Matheson (SGX: J36) has been on a downtrend since last year Jan 2019 when a trading glitch occurred. However, recent technicals indicate upside for the stock.

>> Read more technical reports

RESEARCH REPORTS

Raffles Medical Group Ltd – Near-term pain extended by COVID-19

Recommendation: Neutral (Maintained), Last Done: S$0.920

Target Price: S$0.940, Analyst: Tay Wee Kuang

– 1H20 revenue was below initial estimates by 9% due to impact from COVID-19 resulting in slower business momentum.

– Decline in Hospital Services (-5.4% YoY) partially offset by better Healthcare Services (+6.8% YoY) due to the Group’s support of the government’s COVID-19 initiatives in Singapore.

– Halt in hospital and clinic operations in China during 1H20 as a result of the COVID-19 outbreak expected to set the Group’s breakeven timeline back by up to a year.

– We maintain our NEUTRAL recommendation with a lower TP of S$0.94 (prev S$0.99). We revise our FY20e earnings downwards by 25% taking into account pressure from slowing business momentum observed in 1H20.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: Market Outlook: SG Banking Monthly, SG Bonds Weekly and SG Strategy 3Q20 (with stock picks)

Date: 06 July 2020

For more on Market Outlook

Phillip Research in 3 minutes: #25 – Prime US REIT; Initiation

For more videos on Phillip in 3 Mins

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





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IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

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