Daily Morning Note – 30 APRIL 2019

WEEKLY MARKET OUTLOOK WEBINAR

Register HERE for MONDAY’s 11.15am webinar.

Archived webinars available.

YOUR PHILLIP SUMMARY

The main U.S. stock indexes closed slightly higher, with the Dow gaining 11 points. The S&P 500 and Nasdaq Composite moved further into record territory, rising 0.1% and 0.2%, respectively. Markets were buoyed by new figures showing core inflation weakened, while consumer spending jumped in March. Spotify stock slipped after the company released its earnings. Earnings will be the market’s main focus this week, even as U.S.- China trade talks resume, and the Federal Reserve is due to release a statement on monetary policy.

Alphabet Inc. revenue growth cooled off at the start of 2019, according to an earnings report Monday afternoon that sent shares down in after-hours trading.

Google’s parent company came up short of expectations as all of its major sales categories performed slightly worse than projected in the first quarter, and yet another big fine out of Europe dinged the company’s earnings. Alphabet GOOGL, +1.47% GOOG, +1.21% reported first-quarter earnings of $6.66 billion, or $9.50 a share, on revenue of $29.48 billion, after removing traffic-acquisition costs; a year ago in the same period, Alphabet posted profit of $13.33 a share on ex-TAC sales of $24.86 billion a year ago.



RESEARCH REPORT

DBS Group Holdings Ltd – Record Earnings and ROE

Recommendation: ACCUMULATE (Downgraded), Last Done price: S$28.40

Target Price: S$29.0, Analyst: Tin Min Ying

– 1Q19 Revenue and PATMI were in line with our estimates (excluding write-back). ROE rose to 14.0%, the highest in a decade.

– 1Q19 NIM expanded 5 bps YoY and 1 bps QoQ to 1.88% due to higher interest rates in Singapore and Hong Kong.

– Loans grew 5.7% YoY, driven by non-trade corporate loans.

– Allowances declined 53.7% YoY due to a write-back of S$100mn and improvements in the credit environment.

– Dividend payment frequency has been changed to four times a year. 1Q19’s proposed dividend of 30 cents per share consistent with FY18 full year pay-out S$1.20 per share.

– Downgrade to ACCUMULATE at an unchanged target price of S$29.00. Our rating has been downgraded to Accumulate due to the share price performance.



BREAKING NEWS

Oil climbs, shaking off Trump calls for Opec to offset Iran sanctions.. Oil prices edged higher on Monday, as the market attempted to resume a weeks-long rally that was halted on Friday when US President Donald Trump demanded that producer club Opec raise output to soften the impact of US sanctions against Iran. Brent crude futures fell 11 cents, or 0.2 per cent, to settle at US$72.04 a barrel while US West Texas Intermediate (WTI) crude futures climbed 20 cents, or 0.3 per cent, to end the session at US$63.50.

US consumer spending posts biggest gain since 2009.. The Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of US economic activity, surged 0.9 per cent as households stepped up purchases of motor vehicles and spent more on healthcare.

CDL Hospitality Trusts posts 3.7% lower Q1 DPS at 2.09 Singapore cents. Total distribution per stapled security (DPS) for CDL Hospitality Trusts (CDLHT) declined 3.7 per cent to 2.09 Singapore cents for the first quarter to March 31, from 2.17 Singapore cents a year ago. Revenue shrank 10.6 per cent to S$46.3 million for the first quarter, while net property income (NPI) also fell 10.7 per cent to S$33.8 million, the group reported on Monday before the market opened.

Keppel Corp to raise S$500m via two note issues. Conglomerate Keppel Corporation has priced the issue of its S$150 million 3 per cent notes due 2024 and S$350 million 3.66 per cent notes due 2029, it said on Monday night after the market closed.

China Sunsine posts 26% drop in Q1 net profit to 110.2m yuan. Specialty rubber chemicals producer China Sunsine Chemical Holdings on Monday posted a 26 per cent fall in net profit to 110.2 million yuan (S$22.3 million) for the first quarter ended March 31. Revenue for the quarter shrank 20 per cent to 686.6 million yuan due to a decrease in average selling price (ASP). ASP slid 24 per cent in Q1, mainly on the back of a decrease in raw material prices.

Sunpower Group wins 242m yuan manufacturing, services contract. Sunpower will provide services including design, engineering, procurement and construction of a high salt crystalliser for the Yulin Recycling Economy Coal Comprehensive Utilisation Project. This is the third such contract Sunpower has undertaken for the Yulin Project, which it says is one of the world’s largest coal and chemical projects.

Ascendas Reit posts 6.1% rise in Q4 DPU. Ascendas Reit on Monday reported a 6.1 per cent rise in distribution per unit (DPU) to 4.148 Singapore cents for the fourth quarter ended March 30, from 3.910 cents last year. This was on the back of contributions from 38 newly acquired properties in the UK, four new acquisitions in Australia and two redeveloped properties in Singapore. The contributions were partially offset by non-renewals and downsizing in some of the Reit’s Singapore properties.

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

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.

 

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