Daily Morning Note – 30 March 2022

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PHILLIP SUMMARY

Stocks in Asia are poised to open higher Wednesday as prospects for a de-escalation in the war in Ukraine underpinned risk assets. Longer-dated Treasury yields retreated, and a key segment of the curve inverted for the first time since 2019.

Futures rose in Japan, Australia and Hong Kong, while U.S. contracts slipped. The S&P 500 gained for a fourth day, closing above 4,600 for the first time since mid-January. The Nasdaq 100 climbed as Apple Inc. notched up its longest streak of gains since 2003.

The selloff in U.S. Treasuries stalled, with yields declining across most maturities as hopes for progress in talks between Russia and Ukraine drove down oil prices and inflation expectations. The two-year yield briefly exceeded the 10-year, an inversion that has augered recession, reinforcing concerns that higher interest rates could derail the economic expansion. The dollar declined while the euro rose the most in almost three weeks.

Russia said it will sharply reduce military activity near the capital Kyiv and its chief negotiator said Moscow would take steps to “de-escalate” the conflict. The talks failed to reach agreement on a cease-fire, however, and the Pentagon said Kyiv remains under threat.


Top gainers & losers

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BREAKING NEWS


SG

Restaurants and bars in Singapore are seeing reservations jump after the government announced it would allow larger gatherings and permit alcohol to be sold later in the night from Tuesday (Mar 29). Within 15 minutes of last week’s news that rules would be eased, Grand Hyatt Singapore’s restaurants started getting calls, said Sebastian Kern, its director of food and beverage. “All the restaurants experienced a surge in bookings for increased seating capacity,” he said. At cocktail bar Jekyll & Hyde, owner Chua Ee Chien said reservations have gone up by at least 50 per cent this week and he expects daily takings to increase by 20-30 per cent.

United Hampshire US Reit’s proposed divestment of 2 self-storage properties will be delayed once again as the purchaser is still in the process of carrying out its due diligence on the properties, its manager said in a bourse filing on Tuesday (Mar 29). On Mar 21, the manager first announced that it was extending the due diligence period till Mar 28 for the proposed sale of the 2 properties – Elizabeth Self-Storage and Perth Amboy Self-Storage.

Marine and offshore engineering group Sembcorp Marine (Sembmarine) on Tuesday (Mar 29) gave notice that it recorded 3 consecutive years of pre-tax losses, based on its audited full-year consolidated accounts. The group’s 6-month average daily market capitalisation was S$2.6 billion as at Mar 28, which means the group still meets the financial entry criteria to avoid being placed on the Singapore Exchange’s (SGX) watch list. Firms are placed on the SGX watch list if they record losses for the 3 latest consecutive financial years and have an average daily market cap of under S$40 million over the last 6 months.

The Land Transport Authority (LTA) has called for a large-scale tender for the installation of 12,000 electric vehicle (EV) charging points at public housing carparks by 2025. This tender follows from Transport Minister S Iswaran’s earlier announcement that the government plans to have all Housing and Development Board towns to be ready for electric vehicles, with at least 3 charging points installed in nearly 2,000 carparks by then.


US

US regulators authorised a second booster dose of Pfizer and BioNTech’s Covid-19 vaccine for people 50 and older due to concerns about waning immunity in the age group, the drugmakers said on Tuesday (Mar 29). The US Food and Drug Administration (FDA) also authorised the second booster dose of the vaccine for people aged 12 and older with compromised immune systems. The new boosters – a fourth round of shots – to be administered at least 4 months after the third dose are intended to offer more protection against severe disease and hospitalisation, the companies said.

US consumer confidence unexpectedly edged up in March, suggesting solid job growth offset Americans’ concerns over decades-high inflation and Russia’s invasion of Ukraine. The Conference Board’s index increased to 107.2 from a downwardly revised 105.7 reading in February, which was the lowest in a year, according to the group’s report on Tuesday (Mar 29). The median forecast in a Bloomberg survey of economists called for a reading of 107.

Lululemon Athletica on Tuesday (Mar 29) forecast full-year profit and revenue above estimates as demand for athletic wear remains consistent even as people return to offices, and said it plans selective price increases on some of its products. Shares of the yogawear maker rose about 8 per cent in extended trading as the company also posted better-than-expected fourth-quarter adjusted earnings despite reduced store hours due to an increase in Omicron infections.

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


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