Daily Morning Note – 29 March 2018
WEEKLY MARKET OUTLOOK WEBINAR
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Archived webinars available.
Singapore Coal Monthly – A deeply undervalued sector
Recommendation: BUY, Analyst: Chen Guangzhi
– China will cut down coal capacity by 150mn tonnes in 2018
– Indonesia imposed a price cap of US$70/tonne for domestic coal sales
– China will be more reliant on imported coal
– Indonesia coal prices close to 6-year highs
US stocks finished lower for the second day in a row, with the tech-heavy Nasdaq Composite losing 0.9% due to tech company woes. The benchmark Dow Jones Industrial Average ended essentially flat, down less than a tenth of a percentage point at 23,848.42, but the broader S&P 500 fell 0.3% to 2,605.00.
Oil prices fell about 1% on Wednesday after data showed US crude inventories unexpectedly rose 1.6mn barrels last week, weighing on market sentiment.
US 4Q17 GDP growth was revised up to 2.9% from 2.5%. The full 2017 growth rate was unchanged at a 2.3%, faster than 2016’s 1.5%, but still well below President Donald Trump’s target of 3% and the 2.9% expansion seen in 2015. The upward revision to the 4Q17 growth estimate came from higher consumer spending (3-year high at 7.8%) and higher wholesale business investment. The new estimate does not account for December’s sweeping US$1.5trn tax cuts, which should boost growth in the near term at least for a short time. However, stagnating US productivity and a possible trade war could drag on growth, and the tax cuts will drive the Treasury deeper into the red.
China 1Q18 economic growth remained strong, with hiring close to a record high, but the outlook is cloudy as two key growth engines – property and commodities – show signs of cooling, according to the quarterly survey of thousands of Chinese firms by China Beige Book International (CBB).
Malaysia’s economy is expected to grow at a faster pace at 5.5-6% in 2018, up from the 5-5.5% forecast earlier. Bank Negara Malaysia attributed the faster expansion to improving global demand and private consumption, but it also but highlighted the risks to the outlook from monetary tightening in advanced nations and heightened trade protectionism.
The Orthopaedic Centre, a group of four orthopaedic specialists with four clinics across Singapore, is planning an initial public offering on the Singapore Exchange that could raise more than S$10mn.
Sembcorp Industries Ltd launches its new Climate Change Strategy.
Ezion Holding’s shareholders voted overwhelmingly in favour of a debt refinancing plan.
Hyflux Ltd has reached a global full and final settlement agreement with a Chinese entity over certain non-water industrial project works carried out for the Chinese claimant.
IEV Holdings’s independent auditors have flagged “material uncertainty” over the business based on its financial statement for the year ended Dec 31, 2017.
YuuZoo Corporation, which has had its shares suspended by the regulator, said it has agreed “in principle” for its auditor to assess the veracity of an S$8mn in income that has been the subject of a regulatory query.
Source: SGX Masnet, 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
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