Daily Morning Note – 3 September 2021

Dear valued client,

Major US equity indices again finished at records on Thursday following better weekly jobless claim data ahead of the closely-watched August employment report.

The Labour Department reported a seasonally adjusted 340,000 new filings for aid in the week ended August 28, 14,000 less than the previous week’s upwardly revised level and the lowest since Covid-19 caused millions of layoffs in March 2020.

The report comes ahead of Friday’s labour data, which is expected to show the United States added 750,000 positions last month, with the unemployment rate falling to 5.2 per cent.

The Dow Jones Industrial Average ended up 0.4 per cent at 35,443.82.

The broad-based S&P 500 gained 0.3 per cent to 4,536.95, while the tech-rich Nasdaq Composite Index advanced 0.1 per cent to 15,331.18.


SG News

Singtel on Thursday announced that its joint-venture company, PT Telekomunikasi Selular (Telkomsel) has entered into a sale-and-purchase agreement for the sale of 4,000 telecommunication towers to PT Dayamitra Telekomunikasi (Mitratel) for IDR6.2 trillion (S$580 million). Mitratel is a subsidiary of PT Telkom Indonesia Tbk, which provides telecommunications infrastructure and has managed over 24,000 telecommunication towers across Indonesia. As part of the transaction, Telkomsel, in which Singtel has a 35 per cent interest in, has also entered into a 10-year lease arrangement with Mitratel for rental of tower space, which will take effect from the transfer of the towers to Mitratel. The transaction will enable Telkomsel to optimise its capital structure as it focuses on its core business of providing digital connectivity services to customers in Indonesia, said Singtel in a bourse filing.

Eleven of Singapore’s smaller Reits have made it into the FTSE EPRA Nareit Global Real Estate Index series, according to the index series’ quarterly review changes announced by FTSE Russell on Sept 1. Prior to the review, there were 17 Singapore Reits and property trusts in the FTSE EPRA Nareit Developed Index, according to the index’s factsheet as at July 30, 2021. The entries into the FTSE EPRA Nareit Global Developed Index include AIMS APAC Reit, ARA Logos Logistics Trust, Cromwell European Reit, ESR-Reit, Far East Hospitality Trust, Keppel Pacific Oak US Reit, Lendlease Global Commercial Reit, OUE Commercial Reit, Prime US Reit, SPH Reit and Starhill Global Reit.

There are no changes to the Straits Times Index (STI) constituents, following the September quarterly review. The STI reserve list, comprising the five highest-ranking non-constituents of the STI by market capitalisation, will be (in order of size) Olam International, Suntec Real Estate Investment Trust (Reit), Keppel Reit, Frasers Centrepoint Trust and NetLink NBN Trust. Stocks on the reserve list will replace any constituents that become ineligible as a result of corporate actions before the next review. The next quarterly review of the STI will take place in December. The STI, Singapore’s main stock market benchmark is jointly calculated by FTSE Russell, the index administrator; Singapore Press Holdings, which publishes The Business Times; and the Singapore Exchange (SGX).

US News

Apple further loosened App Store rules on Wednesday, allowing some content companies like Netflix to provide links to their websites so that customers can sign up for paid accounts. The concession was part of a settlement with Japan’s anti-trust regulator, which said the change was enough for it to close a five-year investigation into Apple that focused on video and music apps but did not consider games. The US tech giant, however, must still contend with a raft of other legal and regulatory challenges to rules that it forces game makers to follow, including a closely watched antitrust lawsuit brought by “Fortnite” creator Epic Games. The ban on providing separate links was lifted for so-called reader apps which provide content such as e-books, video and music that don’t offer a free tier of service, instead requiring payment at sign-up.

US medtech firm Baxter International said on Thursday it would buy rival Hill-Rom Holdings for about US$10.5 billion, adding smart hospital beds to its portfolio of patient monitoring and diagnostic products. Baxter said it would pay US$156 per Hill-Rom share, a premium of 7.5 per cent to the stock’s last close. Hill-Rom shares were trading up 3 per cent at US$149.85 before the bell on Thursday, while Baxter shares rose 1 per cent. Media reports had earlier said the companies had been in talks for months and Hill-Rom in July had rejected a US$144 per share offer from Baxter, deeming it too low. On Monday, Reuters reported the companies were nearing a deal. Medical equipment makers in recent months have broadened their offerings through acquisitions to cash in on the sector’s recovery from the pandemic-driven slump last year.

Oil prices rose more than US$1 a barrel on Thursday, rebounding on optimism about global economic growth despite the coronavirus pandemic, and after US crude inventories fell more than anticipated. Brent crude ended up US$1.44, or 2 per cent, at US$73.03 a barrel. West Texas Intermediate (WTI) crude settled up US$1.40, or 2 per cent, to US$69.99 a barrel. The rally briefly pushed US crude futures above the 50-day moving average for the first time in a month, a signal of bullishness for investors. In addition, later-dated crude contracts rallied more than the front-month, another sign that market participants expect demand to rise as supply declines.

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


Welcome to Phillip Securities Research’s second issue of our Ground View magazine.

In this month’s issue on Pre- and post-covid: Healthcare in Singapore we will cover:

1. Composition of Singapore healthcare service industry.

2. Flashback on the performance of Singapore’s healthcare stocks through two decades

3. How healthcare companies in Singapore performance defied the pandemic.

4. An interview with Q & M Dental group founder, Dr Ng Chin Siau.

5. Case study of iX Biopharma’s US FDA Phase 1 and Phase 2 trials.

>> Read more Research reports

HK Reports – Read up on our Hong Kong reports here

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Weekly Market Outlook: Yoma, Koda ltd, BRC Asia, Netlink NBN Trust, Phillip on the ground, SG Weekly

Date: 30 Aug 2021

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