Daily Morning Note – 3 Sep 2019

WEEKLY MARKET OUTLOOK WEBINAR

Register HERE for MONDAY’s 11.15am webinar.

Archived webinars available.

PHILLIP SUMMARY

Asian stocks are set to follow U.S. futures lower as Chinese and American officials struggle to schedule a planned meeting this month to continue trade talks — futures slipped in Tokyo, Sydney and Hong Kong. Cash markets for both U.S. stocks and bonds were closed for the Labor Day holiday, but 10-year Treasury futures erased a decline while the dollar strengthened for the sixth consecutive day to its highest in more than two years. The pound slumped to a two-year low with the U.K. facing a showdown in Parliament over delaying Brexit (again). Elsewhere, crude oil slipped below $55 a barrel amid concerns a hurricane battering the U.S. east coast and an economic slowdown from the trade war may dent demand.



BREAKING NEWS

Hoe Leong Corporation on Monday said it has received a statutory demand under the Companies Act from the law firm acting on behalf of United Overseas Bank (UOB) which is seeking payment of about S$5.7 million from the company within 21 days from Aug 29, 2019, the date of receipt of the statutory demand.

KOON Holdings auditor Ernst and Young LLP has issued a disclaimer of conclusion over the construction and precast firm’s interim financial results for the six months ended June 30.

SINGAPORE’S hotels appear to have garnered robust bookings for July and August, with expectations for a healthy performance in the second half of the year.

China said Monday it had lodged a complaint against the US with the World Trade Organisation (WTO), one day after new tariffs imposed by Washington on billions of dollars of Chinese goods came into force.

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

TECHNICAL PULSE

Starhub Ltd

Recommended Action: Technical BUY

Although Starhub Ltd (SGX: CC3) is still on a downward trend, we believe Starhub will be heading for an upward corrective move.

Read more technical pulse

RESEARCH REPORTS

Micro-Mechanics (Holdings) Ltd – Getting paid to wait

Recommendation: NEUTRAL (Maintained), Last Done: S$1.60

Target Price: S$1.60 Analyst: Paul Chew

– 4Q19 revenue and PATMI were below our expectations. Gross margins suffered from weaker volumes and the higher fixed operating cost than a year ago.

– Final dividends were maintained at 6 cents in 4Q19. FY19 DPU is S$0.10. Free-cash flow at a record high despite the decline in earnings

– We marginally lowered our target price to S$1.60 (previously S$1.63). Our FY20e earnings have been reduced by 5%. We peg our valuations to 15x FY20e PE, in-line with back-end semiconductor supply chain valuations. The downturn in back-end semiconductor volumes is at the late stage. Based on the past cycles, a rebound should be materialising from the December quarter onwards. Investors are paid a 6% yield as they wait for the recovery. Our NEUTRAL recommendation is unchanged.


Walmart Inc – Positive comps and international expansion

Recommendation: TECHNICAL BUY, Analyst: Edmund Xue

– Ramp-up of delivery services to boost volume sales growth.

– Solid results in international markets.

– Tariffs unlikely to pose significant headwind.


Read more research reports

Webinar Of The Week

Market Outlook: : (PSR) Golden Energy and Resources Ltd, CapitaLand Limited, Singapore REITs Monthly, Phillip US/China Weekly, Phillip Singapore Weekly & Technical Outlook

Date: 26 August 2019

For more on Market Outlook

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





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 “as 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.