Daily Morning Note – 3 November 2021

PHILLIP SUMMARY

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.


BREAKING NEWS

SG

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.

US

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

Recent Podcasts:

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

Visit www.stocksbnb.com to learn more!


Join our Phillip Securities Research Telegram channel for the latest update on our stock coverage!

Click here to join: https://t.me/stocksbnb


Webinar Of The Week

Weekly Market Outlook: Apple, Netflix, Facebook, Keppel DC, Fraser, IFAST, Japfa, SPH, Sheng Siong.

Date: 01 November 2021

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #29 Keppel Corporation; 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





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