DAILY MORNING NOTE | 29 June 2022

Singapore shares ran out of steam and traded underwater through most of Tuesday (Jun 28), although an uphill struggle in the final hour paid off with marginal gains, as caution set in with lingering inflation and recession worries. The Straits Times Index (STI) finished 2.67 points or 0.09 per cent higher at 3,140.21, following an overnight pause in US stocks’ relief rally.

Wall Street stocks tumbled on Tuesday (Jun 28) as a gloomy consumer confidence report offset positive news about China’s move to scale back Covid-19 restrictions. Equities opened solidly higher but dropped into negative territory soon thereafter following a consumer confidence reading at its lowest level in more than a year on surging inflation. The downcast report was due in part to the feeling higher prices would persist, suggesting consumers aren’t sure the Federal Reserve’s aggressive efforts to tame inflation will work. The Dow Jones Industrial Average dropped 1.6 per cent, a loss of nearly 500 points, to close at 30,946.99. The broad-based S&P 500 shed 2.0 per cent to 3,821.55, while the tech-rich Nasdaq Composite Index sank 3.0 per cent to 11,181.54.

 

Top gainers & losers

Factsheets

SG

Ma Zhi has been terminated from his role as an executive director of Raffles Infrastructure after internal investigations, the company disclosed in a Tuesday (Jun 28) bourse filing. “(Ma) had failed to meet the standards of the duties and obligations of an executive director of the company,” Raffles Infrastructure said in the filing, adding that the decision was based on documentary evidence. Further details were not provided. Ma had been appointed to the role in April 2020. According to the company’s website, his other roles include serving as the non-executive director of China Moutai Tasting Centre (Hong Kong Limited) and as a partner in GSR Capital. He had started out as a reporter and producer at CETV Station in 2003, before embarking on a corporate career. Shares of Raffles Infrastructure closed flat at S$0.06 on Tuesday.

DBS has inked an agreement to sell 33 Changi North Crescent (33CNC), a property which the bank had previously taken possession of from embattled Tee International. In a bourse filing on Tuesday (Jun 28), Tee disclosed that DBS has entered into a sale and purchase agreement with Applied Materials South East Asia for 33CNC, with the completion expected to take place on or around July 18. The aggregate sale consideration for 33CNC was determined based on the fair value of the property of S$18 million. DBS will use the proceeds to satisfy outstanding amounts owed by Tee to the bank, as well as to other creditors who have a security over the sale proceeds of the property. It will also cover transaction expenses incurred by DBS. In February, Tee received an order on Feb 17 to assist the Commercial Affairs Department with an investigation regarding an offence under the Securities and Futures Act. Trading in shares of Tee has been suspended since mid-2021.

The 10-year average return for the July issue of Singapore Savings’ Bond (SSB) soared to one of its highest at 2.71 per cent, just a few basis points short of its last peak in November 2015. The first-year interest rate for the SSB stands at 1.69 per cent, while its 10-year interest rate was offered at 3 per cent. The higher interest rates reflect the tightening economic environment in recent times, coupled with expectations of further rate hikes from the Fed after it raised benchmark interest rates three-quarters of a percentage point — representative of its most aggressive hike since 1994. Published forecasts also showed that most policymakers expect rates would rise to 3.4 per cent by the end of the year. The maximum amount offered in the upcoming issue of SSBs is capped at S$600 million. The first interest payment will be made on Jan 1, and subsequently pay out every 6 months on Jul 1 and Jan 1 until maturity. Applications for the last round of bonds issued in June totaled S$916.5 million, though only S$350.0 million were alloted. The first-year interest rate was 1.43 per cent and the 10-year interest rate stood at 2.71 per cent. The average return over 10 years was valued at 2.53 per cent per annum.

US

Leaders of the Group of Seven rich nations on Tuesday watered down a key pledge on ending fossil fuel financing abroad, as the need to tackle global warming clashed with fears over energy shortages. The G-7 countries – Britain, Canada, France, Germany, Italy, Japan and the United States – ended a summit in the Bavarian Alps by reaffirming their goal to reduce reliance on dirty fossil fuels and speed up the green energy transition. But after 3 days of haggling, they also agreed to allow public investment in new international fossil fuel projects under certain conditions, as countries scramble to break free from Russian oil, coal and gas following the invasion of Ukraine. German Chancellor and summit host Olaf Scholz “promised a crucial boost for international climate action and he didn’t deliver,” said Friederike Roder, vice president at the non-profit group Global Citizen. An alliance of civil society organisations including Oil Change International also issued a scathing verdict, condemning the “loopholes” on gas that made it into the final communique. The text reiterates that G-7 nations will still halt new public investments in overseas fossil fuel projects by the end of 2022.

The US trade deficit in goods narrowed in May as exports increased, suggesting that trade could contribute to economic growth this quarter for the first time in nearly two years. The goods trade deficit fell 2.2 per cent to US$104.3 billion, the Commerce Department said on Tuesday. Goods exports rose US$2.0 billion to US$176.6 billion. Imports of goods slipped US$0.4 billion to US $280.9. A record trade deficit weighed on the economy in the first quarter, resulting in gross domestic product declining at a 1.5 per cent annualised rate. Trade has subtracted from GDP for seven straight quarters.

Uber Technologies and Australia’s main transport union agreed on Tuesday to back a federal body that enforces minimum pay for the company’s drivers, joining a global thawing of relations between the ride-hailing giant and industrial bodies. In a joint statement, Uber and the Transport Workers Union (TWU) said they signed an agreement to support an unspecified federal body to “set minimum and transparent enforceable earnings and benefits/conditions for platform workers”. The new body would also oversee disputes that resulted in drivers in the so-called “gig economy” having their accounts shut off, and protect drivers’ rights to organise with a “collective voice”, the statement said. The move, though largely symbolic, reflects a broader response by the San Francisco tech giant to pressure from unions around the world to put a floor under wages that supersedes its fee-setting algorithms.

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

POEMS Podcast:

Research Videos

Weekly Market Outlook: Adobe Inc, Del Monte Pacific, HRnetGroup Limited, SGWeekly and …
Date: 27 June 2022
Click here for more on Market Outlook.
Sign up for our webinars here, and be among the first to receive economy and market updates.

PHILLIP RESEARCH IN 3 MINS

Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
Click here for more on Phillip in 3 mins.

Follow our Socials

Facebook Social Icon Instagram Icon Twitter Social Icon Youtube Social Icon Linkedin Social Icon TikTok Social Icon Spotify Social Icon

Join our Singapore Equity Research Community on POEMS Mobile 3 App for the latest research reports, market updates, insights and more

Click to join!

Disclaimer

The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.

Confidentiality Note

This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you

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.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com