Daily Morning Note – 3 July 2020


Stocks in Asia Pacific were set for a positive Friday start after U.S. nonfarm payrolls released overnight beat expectations, raising optimism over the prospects of an economic recovery from the coronavirus pandemic. Futures pointed to a higher open for Japanese stocks, with the Nikkei futures contract in Chicago at 22,335 while its counterpart in Osaka was at 22,310. That compared against the Nikkei 225′s last close at 22,145.96. Shares in Australia were also set for a positive start to their trading day. The SPI futures contract was at 6,048, as compared to the S&P/ASX 200′s last close at 6,032.70.


RESTAURANT chain operator and caterer Tung Lok Restaurants sank into the red in the second half of FY2020 ended March, with a net loss of S$1.2 million, reversing from earnings of S$405,000 a year ago. Revenue for the period was hit when the novel coronavirus struck Singapore in late January – the beginning of Tung Lok’s Q4 and a traditionally busy period for its restaurants.

LISTED conglomerate Sembcorp Industries’ urban business has formed a joint-venture company with Japanese property firm CRE Asia, as part of an effort to facilitate the expansion of its warehousing properties in Vietnam. Sembcorp Industries, in a regulatory filing on Thursday, said that its wholly-owned urban business Sembcorp Development has partnered CRE Asia to form a joint-venture company, Sembcorp Infra Holdings. The joint-venture company, in which Sembcorp Development has an effective ownership of 70 per cent, was incorporated in Singapore with an issued capital of US$100,000.

MAINBOARD-listed property investment company Chuan Hup announced that its associated company has received approval from the Australian authorities to develop a 32-level residential tower in a prime area in Perth. The company, in a regulatory filing on Thursday, said that its associated company, 240 Adelaide Terrace Pty Ltd, has been given the green light by Perth’s development assessment panel to proceed with the project in Adelaide Terrace, near the city’s central business district.

SINGAPORE Telecommunications’ (Singtel) wholly-owned Australian subsidiary Optus on Thursday confirmed a contract with Airbus Defence and Space for a new OneSat software-defined satellite. The Optus 11 will be deployed for Australia and New Zealand in 2023 at the current Optus D1 orbital location, sitting 36,000 kilometres above Earth.

TWO subsidiaries of Catalist-listed Hatten Land are looking to undergo debt restructuring, on top of the group’s other initiatives to make its property development business more resilient in light of ongoing pressures from the Covid-19 pandemic. The subsidiaries, MDSA Resources and MDSA Ventures, are the developers for the group’s integrated mixed-use projects Hatten City Phase 1 and 2 in Malacca, Malaysia.

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


Singapore Banking Monthly – Prudence essential to weather headwinds

Recommendation: Neutral (Maintained), Analyst: Tay Wee Kuang

– Interest rates remains subdued in June, with 3M-SIBOR unchanged at 0.56% from May, as lending rates look to stay lower for longer.

– Loans growth continue slowing in May to 0.51% YoY, as both business and consumer loans take a hit from the Circuit Breaker period.

– SGX announced the launch of FTSE Taiwan Index futures in July 2020 in a move to replace MSCI products expiring in February 2021. Monthly MSCI Taiwan contracts turnover make up 13% of equity index futures contracts in May.

– SGX expands footprint into FX OTC market with US$128mn acquisition of the remaining 80% stake in cloud-based trading platform BidFX.

– Maintain the Singapore Banking Sector at NEUTRAL. Outlook for the sector contingent on fee income resilience as Singapore enters phase 2 of economic reopening. Underlying estimates remain unchanged.

Ascott Residence Trust – Flush with liquidity

Credit Analyst: Timothy Ang

– We are Overweight the ARTSP 3.07% perpetual (Yield to worst 3.16%, Yield to call 5.89% assuming called in 1 year, 264bps spread) as it looks interesting on the Ascott curve after resetting.

– While COVID-19 heavily hit operations causing some lessees to file for bankruptcy, we note that ART’s liquidity covers operating expenses for >2 years and sponsorship to Ascott Limited (part of CapitaLand Group) provides better access to funding.

>> Read more research reports

HK Reports– Read up on our Hong Kong reports here


Webinar Of The Week

Market Outlook: (PSR) Yoma Strategic Holdings (Initiation), SG REITs Sector and Phillip Singapore Weekly

Date: 22 June 2020

For more on Market Outlook

Phillip Research in 3 minutes: #23- Yoma Strategic Holdings; 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

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