Daily Morning Note – 3 November 2021
U.S. stock indexes ended at fresh peaks Tuesday, with all three major benchmarks notching all-time highs for a third straight trading session for the first time since December 2019, according to Dow Jones Market Data. Stocks extended their winning streak amid better-than-expected earnings reports ahead of a Federal Reserve policy statement Wednesday that is likely to bring confirmation of a start to a reduction in its bond purchases. Third-quarter corporate earnings have held up despite supply chain disruptions, rising commodity prices and uncertainty about economic growth in the final three months of this year.
OUE Commercial Reit’s (OUE C-Reit) amount available for distribution was S$30.2 million for the third quarter ended Sep 30, down 7.5 per cent year on year, the real estate investment trust (Reit) said in a Singapore Exchange business update on Tuesday after market close. Revenue was down 17.5 per cent at S$58.5 million, while net property income for the quarter fell 17.1 per cent to S$46.2 million. The Reit attributed this mainly to the deconsolidation of OUE Bayfront’s performance, after the divestment of its 50 per cent stake in the property.
TLV Holdings will change its trading counter name on the Singapore Exchange to “Taka Jewellery” from the current “TLV”, with effect from Nov 8, 9 am. The company has also officially changed its name to Taka Jewellery Holdings after the Accounting and Corporate Regulatory Authority (Acra) issued a Notice of Change of Name with effect from Tuesday (Nov 2).
The office of the US Trustee, which is the United States Department of Justice’s bankruptcy watchdog, has raised objections to liquidation plans filed by units of the beleaguered Eagle Hospitality Trust (EHT), saying the plan is “quite complex, convoluted and difficult to digest”. The US Trustee is now urging Delaware bankruptcy court judge Christopher Sontchi, who is handling the cases, to deny the motion and relief sought by debtors of the various EHT-linked units.
Singapore Exchange (SGX) will be licensing its iEdge Bitcoin Index to Propine, one of the first Monetary Authority of Singapore-licensed digital asset custodian and Bitcoin exchange-traded fund service providers. The index was developed in collaboration with UK-based digital asset market data provider CryptoCompare and was launched back in September 2021. The index tracks over 165 global spot exchanges with only AA and A grade venues considered for the indices.
DBS will invest S$300 million next year to boost its digital-banking capabilities for its wealth and retail customers, the bank announced on Tuesday. The investment, which represents a 14 per cent year-on-year increase, will go towards bolstering tech talent and infrastructure, using predictive technology in more financial solutions, and scaling the bank’s online and offline capabilities across the region.
Singapore is seeking to cement itself as a key player for cryptocurrency-related businesses as financial centres around the world grapple with approaches to handle one of the fastest-growing areas of finance. “We think the best approach is not to clamp down or ban these things,” said Ravi Menon, managing director of the Monetary Authority of Singapore, which regulates banks and financial firms. Instead, MAS is putting in place “strong regulation,” so firms that meet its requirements and address the multitude of risks can operate, he said in an interview.
Denmark, the United States and 12 other countries on Monday backed a goal to reduce emissions by the global maritime sector to zero by 2050, a target to be fleshed out in negotiations at the United Nations shipping agency. The initiative, led by Denmark and announced on the sidelines of the UN COP26 climate summit in Glasgow, Scotland, aims to build support among countries for the goal at the International Maritime Organization, which is considering new emissions-cutting measures by a 2023 deadline.
Apple Inc has cut back on production of its iPad tablets to allocate more components to the iPhone 13, the Nikkei said on Tuesday, citing multiple sources. Production of the iPad was down half from Apple’s original plans for the past two months, the newspaper said on its website, adding that parts intended for older iPhones were also being switched to the iPhone 13.
Crypto exchange Luno, Digital Currency Group (DCG), has secured an over US$700 million (S$943.3 million) investment round from SoftBank’s Vision Fund II and Latin American Fund valuing the company at US$10 billion. Other equity investors led by the two funds include Google’s Capital G, Ribbit Capital, GIC, Tribe Capital and Emory University who purchased stock from existing investors.
Metaverse platform The Sandbox has secured US$93 million in its Series B fundraising round led by SoftBank Vision Fund 2. Other investors in the round include True Global Ventures 4 Plus (TGV 4 Plus) Fund, Animoca Brands, Liberty City Ventures, Galaxy Interactive, Kingsway Capital, LG Technology Ventures, Polygon Studios and Samsung Next, TGV said in a statement on Tuesday (Nov 2).
BP said it would buy back an additional US$1.25 billion of shares, using the proceeds of surging energy prices to woo investors who have become disenchanted with oil and gas. The last of the western world’s supermajors to report third-quarter earnings, BP followed very much in its peers’ footsteps by reporting a big increase in profit from a year earlier. After years of poor returns, the industry is funnelling most of this extra cash into repurchasing shares and paying dividends. That’s pleasing shareholders who are increasingly concerned about climate change, but lack of investment in new production has contributed to the current global energy crunch.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Keppel Corporation – Rival bid for SPH weigh despite strong 3Q21 performance
Recommendation: Buy (Maintained), Last Done: S$5.32
Target price: S$7.07, Analyst: Terence Chua
– 3Q21 net profit was a significant improvement YoY with improved performance in all its segments.
– With the latest rival bid from a Temasek-backed consortium for SPH, we outline three possible scenarios that Keppel could undertake and the implications of all the different scenarios.
– Discussions on proposed Keppel O&M and SembCorp Marine combination and establishment of Asset Co progressing steadily. Timeline for a potential definitive agreement extended to 1Q22 from 4Q21.
– Maintain BUY with unchanged SOTP TP of S$7.07. We valued the Group based on the four new segments unveiled during Vision 2030 to better reflect the Group’s reporting segments going forward. Our TP translate to about 1.0x FY22e book value, in-line with its 5-year average. Catalysts expected from SPH resolution and a successful resolution to its O&M unit.
Technical Pulse: Grand Venture Technology Ltd
Recommended: BUY; Analyst: Chua Wei Ren
Grand Venture (SGX: JLB) Impulse 5-wave structure has been completed. Recent technical indicate that there will be a strong break to the upside.
Buy stop: 1.34 Stop loss: 1.15 Take profit 1: 1.55 Take profit 2: 1.80
POEMS Podcast: Let the Money Talk
Frasers Crentrepoint Trust – Today’s Trading Idea Ep 17
Facebook Incorporation 3Q21 Results – SGX Company Insights Ep 38
Netflix Incorporation 3Q21 Results – SGX Company Insights Ep 37
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Webinar Of The Week
Weekly Market Outlook: Apple, Netflix, Facebook, Keppel DC, Fraser, IFAST, Japfa, SPH, Sheng Siong.
Date: 01 November 2021
Updates summarised in 3 minutes
Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
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