Daily Morning Note – 31 August 2021

Dear valued client,

The S&P 500 and Nasdaq ended at records for the second day straight on Monday as Wall Street traders bet the US economy would continue recovering from the pandemic.

The broad-based S&P 500 finished 0.4 per cent higher at 4,528.79, while the tech-rich Nasdaq Composite Index gained 0.9 per cent to close at 15,265.89.

However, the benchmark Dow Jones Industrial Average lost 0.2 per cent to end at 35,399.84.

Preeminent on traders’ minds is the fast-spreading Delta variant of Covid-19, which has forced some businesses to reimpose mask-wearing rules.

Another worry is Hurricane Ida, which struck the major petroleum hub of southern Louisiana and could potentially hit oil markets.

But investors were encouraged by Federal Reserve Chair Jerome Powell’s indication Friday that while the central bank may pull back its monetary stimulus by the end of the year, it is not likely raise interest rates for some time.


BREAKING NEWS


SG News

MM2 Asia – which operates cinemas under the Cathay brand – has entered into a sale and purchase agreement with local investment firm Kingsmead Properties to sell its cinema business for S$84.8 million. The deal will require shareholders’ approval at an extraordinary meeting that will be convened, as well as approval from the regulators. mm2 Asia’s founder Melvin Ang said: “The cinema business has been a strategic part of the group’s content creation and distribution business, but it has been affected by Covid-19. With this proposed sale, it will stabilise the group’s financial situation and allow mm2 to continue to focus on the development and strengthening of core production content growing opportunities. Proceeds from the proposed deal will be used to pare down the group’s borrowings, including convertible bonds due on Dec 31, 2021. The company expects to receive net proceeds of approximately S$67.34 million (after deducting all transactions costs and expenses).

Engineering company OKP has landed a S$49.6 million contract from national water agency PUB for drainage improvement works in Sungei Selarang. The works involve the upgrading of Sungei Selarang, which includes construction of a contiguous bored pile (CBP) wall, ground improvement, reinforcement concrete, and ancillary activities. The 33-month contract starts on Sept 8 this year and is slated for completion by June 7, 2024. OKP has secured other contracts from PUB in the past and is presently working on another project with PUB. The group’s current net construction order book amounts to S$263.7 million, with projects extending to 2024, OKP said.

ESR-Reit has entered into an agreement to divest an industrial building, 45 Changi South Avenue 2, for S$11.1 million. The price tag represents a 7.8 per cent premium to the property’s fair value of S$10.3 million, said the Reit in a filing to the Singapore Exchange on Monday. The net proceeds will be used to repay outstanding borrowings, finance upcoming asset enhancements and/or fund general working capital requirements. Adrian Chui, chief executive of the Reit’s manager, said, “This divestment represents an opportunity for us to divest one of our non-core assets at a premium to book value.” Post-divestment, ESR-Reit’s portfolio will consist of 57 properties across Singapore with a total gross floor area of approximately 15.6 million sq ft. The sale is subject to approval by JTC Corporation and is expected to be completed in 1Q 2022.


US News

Apple on Monday announced it is buying classical music streaming service Primephonic and will launch an app dedicated to the genre. Apple did not disclose how much it paid for Europe-based Primephonic, which confirmed that it is becoming part of the iPhone-maker’s music service. “We felt compelled to develop a streaming service that truly gets classical right – so that’s what we did over the last three years,” the Primephonic team said in the post. “But to fully achieve the next phase of our mission, we need to bring our classical streaming expertise to millions of listeners worldwide.” Primephonic will go offline on September 7, with subscribers being offered six months of free use of Apple Music, according to the companies.

Gold prices scaled on Monday to their highest in more than three weeks after US Federal Reserve chair Jerome Powell stopped short of providing any clear guidance on the timeline for paring economic support at the Jackson Hole economic conference. Spot gold was up 0.2 per cent at US$1,819.71 per ounce, as of 12.46am GMT. Earlier in the session, bullion hit a peak since Aug 4 at US$1,820.50. US gold futures were up 0.2 per cent at US$1,823.10.

Oil rose on Monday, lifted as US Gulf Coast platforms, refineries and pipelines grappled with uncertainty on restart timelines after Hurricane Ida wreaked havoc on the region. Gains were capped as Opec+ looked set to go ahead with a planned oil output increase. Global benchmark Brent settled at US$73.41 a barrel, up 71 cents or 0.98 per cent. Brent touched a session high of US$73.69, the highest since Aug 2. US crude futures rose 47 cents, or 0.68 per cent to US$69.21 a barrel.

The US Dollar steadied near two-week lows on Monday, held back by the message from the US Federal Reserve chief that there is no hurry to dial back massive stimulus. The allure of the greenback took a knock on Friday when Fed chair Jerome Powell said tapering could begin this year, but that the central bank would remain cautious. Investors have responded by pushing down the dollar index, which measures the currency’s value against major rivals. It hit a two-week low at 92.595 before steadying around 92.69, little changed on the day. The euro was trading at US$1.1800, steady on the day but close to a three-week high touched in Asian trade at US$1.1810. Japan’s yen rose to its strongest since last Wednesday at 109.70 per US dollar.


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

HK Reports – Read up on our Hong Kong reports here

Webinar Of The Week

Weekly Market Outlook: Manulife, HRnetGroup, SembCorp, Innotek, ComfortDelgro, Singtel, Q&M…..

Date: 23 Aug 2021

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation

For more videos on Phillip in 3 Mins

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 揳s 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