Daily Morning Note – 3 July 2019

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YOUR PHILLIP SUMMARY

The S&P 500 index clinched another all-time high on Tuesday afternoon, even as trading in assets perceived as safe havens, like U.S. Treasuries, benefitted from pessimism about the global economic outlook and the prospect of an ongoing trade war with China. The Dow Jones Industrial Average was up 69 points, or 0.26%, at 26,786.75, the S&P 500 gained 0.29%, or 8.7 points, setting a new record of 2,973.02, while the Nasdaq Composite Index closed about 18 points higher, or 0.22%, to reach 8,1069.06. Low debt yields globally and the prospect of renewed monetary policy stimulus from global central banks are encouraging equity investors.


TECHNICAL PULSE

Comfort Delgro

Recommended Action: Technical BUY

Comfort Delgro’s bullish rise has been halted in May 2019. The subsequent recovery from 2.40 is facing a major resistance at 2.73 as the price is showing signs of exhaustion and the stock may retreat.



RESEARCH REPORT

Singapore Banking Monthly – Consumer weakness offset by business loans

Recommendation: OVERWEIGHT (Maintained), Analyst: Tin Min Ying

– Singapore loan growth stable at 2.08% YoY. Consumer loans (-0.39% YoY)
contracted for the second time in decades, dragged by persistent weakness in
housing loans.

– Domestic deposits rose 7.4% YoY, held up by fixed deposit growth of 22.0%
YoY, the fastest in twelve years. CASA deposits continues to contract at -1.1%
YoY.

– 3M SIBOR stable at 2.002%, while 3M SOR dipped 22 bps to 1.833%.

– Maintain the Singapore Banking Sector at Overweight. While the trade war
affects investor sentiments in the near term, we believe the banks’
fundamentals remain intact to withstand risks and deliver growth on a
sustained basis.


BREAKING NEWS

Tesla reported a surge in second-quarter deliveries on Tuesday, while other US automakers suffered drops in sales for the first half of 2019, with higher vehicle costs weighing on consumers.

Petroleum-linked shares tumbled with oil prices on Tuesday as Wall Street stocks finished a choppy session higher, with the S&P 500 at a second straight record.

European shares closed comfortably higher on Tuesday, with utilities and consumer stocks leading gains as investors brushed aside US President Donald Trump’s threat to impose tariffs on an additional US$4 billion of EU goods.

Wall Street stocks pulled back early Tuesday amid lingering trade uncertainty as the United States threatened to impose additional tariffs on European goods.

SINGAPORE equities got the week off to a flying start following a surprise outcome from the Osaka meeting between the US and China. But Monday’s gains were followed by Tuesday’s flat session.

REAL estate developer Yanlord Land Group has garnered around 1.43 billion yuan (S$0.28 billion) in pre-sales at the inaugural launch of its Yanlord Gardens development in Nantong.

Monetary Authority of Singapore mulls raising leverage limit for Singapore Reits.

In a move to enable Singapore real estate investment trusts (S-Reits) to better compete against private capital and foreign Reits when making real estate acquisitions, the Monetary Authority of Singapore (MAS) is considering raising their current leverage limit of 45 per cent.

Ascendas Residence Trust and Ascendas Hospitality Trust enter combination deal to become Asia Pacific’s largest Hospitality Trust with Asset value of 7.6 billion.

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 Important Information





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