DAILY MORNING NOTE | 3 November 2023

Trade of the Day

Frasers Logistics & Commercial Trust (SGX: BUOU)

Analyst: Zane Aw

(Current Price: S$1.08) – TECHNICAL BUY
Buy price: S$1.08 Stop loss: S$1.03 (-4.63%)
Take profit 1: S$1.16 (+7.41%) Take profit 2: S$1.20 (+11.11%)

Netflix Inc. (NASDAQ: NFLX)

Analyst: Zane Aw

(Current Price: US$420.19) – TECHNICAL BUY
Buy price: US$420.19 Stop loss: US$404.00 (-3.85%)
Take profit 1: US$437.00 (+4.00%) Take profit 2: US$448.00 (+6.62%)

Thai SDR Monthly October 2023

Analyst: Zane Aw

– Review of performance in October – All 3 counters were down in the month, with Airports of Thailand Public Co. and PTT Exploration & Production Public Co. Ltd both down over 4% while CP All Public Co. Ltd slumped over 8%

– For their current trends, Airports of Thailand Public Co. and CP All Public Co. Ltd are in a downtrend while PTT Exploration & Production Public Co. Ltd is in a range consolidation phase

– As we enter November, CP All Public Co. Ltd is likely to see further downside with its current weak price action. Airports of Thailand Public Co. could rebound with a recent test of support, however the upside is expected to be limited with the fresh occurrence of a long-term uptrend breakdown. PTT Exploration & Production Public Co. Ltd is likely to see continued sideways consolidation ahead given a slowdown in bullish momentum

Singapore stocks closed higher on Thursday (Nov 2), in line with a global rally after the Federal Reserve kept interest rates unchanged for the second straight meeting. The Index rose 0.2 per cent or 5.72 points to close at 3,082.49. Across the broader market, gainers outnumbered losers 383 to 217, after 1.2 billion securities worth S$926.2 million were traded.

WALL Street stocks powered higher on Thursday, extending a rally following the latest Federal Reserve meeting as traders hope for a year-end upswing. The Dow Jones Industrial Average piled on nearly 565 points, or 1.7 per cent to finish at 33,839.08.The broad-based S&P 500 gained 1.9 per cent to 4,317.78, while the tech-rich Nasdaq Composite Index advanced 1.8 per cent to 13,294.19.

SG

Yangzijiang Shipbuilding secured US$770 million of order wins for the third quarter of its 2023 financial year. This brings the total order wins for the first nine months of the current FY to US$6.54 billion, more than double its US$3 billion target for the whole FY. The shipbuilder said in a business update on Thursday (Nov 2) that it has hit a record high order book of US$14.8 billion year to date and delivered 42 vessels out of its target of 57 for the whole year.

Keppel Infrastructure Trust almost doubled its distributable income over the first nine months of 2023, and will be paying a special distribution to unitholders, said its manager on Thursday (Nov 2). The company’s distributable income rose 93.2 per cent to S$266.1 million over the first nine months of 2023, compared to the same period the year before, supported by new acquisitions and successful value-creation strategy, said its manager in a bourse filing.

SIA Engineering Company recorded an 82.6 per cent increase in profit to S$59.3 million for the six months ended Sep 30, 2023, from S$32.5 million the year before. Revenue rose 41.9 per cent to nearly S$514 million in H1, from S$362.2 million a year ago, on the back of a rebound in the travel sector, with flight activities growing post-pandemic.

Singapore Post is back in the black with a net profit of S$11.5 million for the fiscal first half ended Sep 30, from a net loss of S$9.9 million a year before. The better performance was despite a fall in revenue. The net profit was driven by lower volume-related expenses and operating expenses, as well as a smaller loss on exceptional items.

Frasers Property is among Singapore-listed businesses affected by the fallout of a renowned Zimbabwean forest-conservation carbon-crediting project that has drawn flak for allegedly blowing up numbers related to its impact on halting deforestation.

US

Marriott International reported a rise in quarterly profit on Thursday (Nov 2), as the US hotel operator benefited from higher room prices and resilient travel demand. Hotel operators have benefited in the last few months from a recovery in international travel as consumers took advantage of a strong US dollar and flexible work arrangements to vacation overseas.

Adani Enterprises’ quarterly profit dropped 50 per cent on slowing revenues, highlighting headwinds for billionaire Gautam Adani’s flagship firm after it battled a brutal short seller attack earlier this year. The Ahmedabad-based company posted net income of 2.28 billion rupees (US$37.3 million) for the quarter through September, compared with 4.6 billion rupees in the year-ago quarter.

Starbucks leaned on the hype around its Pumpkin Spice Latte and other fall-themed drinks in North America to surpass Wall Street targets for fourth-quarter results, as demand for its pricey coffees defied sticky inflation. It expects fiscal 2024 global comparable sales to grow between 5 per cent and 7 per cent, with China sales also projected to rise 4 per cent to 6 per cent in the last three quarters.

Hugo Boss on Thursday (Nov 2) reaffirmed its full-year outlook after posting quarterly results in line with analysts’ expectations, supported by strong demand for its products despite a broader downturn in the luxury sector. The German fashion house reported a 15 per cent rise in third-quarter sales to S$1.49 billion, spurred by the launch of its fall/winter 2023 collections in August.

Fox Corp reported a near 33 per cent drop in first-quarter profit on Thursday (Nov 2) due to a slowdown in political advertising and higher expenses stemming from the broadcast of the women’s soccer World Cup as well as investments in its digital platform. The results are the first from Fox since Rupert Murdoch stepped down as chairman, solidifying his son Lachlan’s role as the leader of the media empire.

Apple on Thursday reported that sales fell for the fourth consecutive quarter when compared to the prior year, but profit rose on the back iPhones and services. The tech giant said it made a profit of US$23 billion on revenue of US$89.5 billion, which was down slightly from the same period last year.

Paramount Global reported third-quarter earnings that beat estimates thanks to narrowing losses at its Paramount+ streaming business. Third-quarter profit for the owner of the CBS, MTV and other channels came to 30 US cents a share, excluding some items, the company said on Thursday (Nov 2). Analysts were forecasting 10 US cents.

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

RESEARCH REPORTS

Phillip Macro Update – Key Points for November FOMC Meeting

Analyst: Shawn Sng

1. Second hold-back on the hike cycle – In this FOMC meeting, the committee of the U.S. Federal Reserve (Fed) expressed their view that the current monetary policy stance is seen as restrictive, exerting downward pressure on economic activity. Therefore, all members of the committee voted unanimously to maintain the benchmark federal funds rate within the range of 5.25-5.50% for a second time. This decision to keep the policy interest rate unchanged was in line with market expectations.

2. Inflation still hovering above the 2% targeted range – Personal Consumption Expenditure (PCE) which is the Fed’s preferred measurement of inflation has continued to show signs of moderation with the latest Total PCE and Core PCE for September coming in at 3.4% YoY and 3.7% YoY, respectively (a slight decrease from August 3.4%,3.8%) while for Consumer Price Index (CPI), the latest headline CPI and Core CPI for September came in at 3.7% YoY and 4.1% YoY, respectively (a slight decrease from August a well 3.7%,4.3%).

3. Federal Reserve Projection/Guidance – In terms of guidance, there was no dot plot graph provided in this meeting as it is published every quarter. The next dot plot graph will be available in the December meeting. However, a more dovish sentiment was seen in this meeting as the committee noted that persistent tighter financial conditions such as higher bond yields could have implications on the path of its monetary policy, similar to what was seen in this meeting, although optimism for rates to hover at the current level is evident.

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