DAILY MORNING NOTE | 31 August 2023

Trade of the Day

Amazon.com, Inc. (NASDAQ: AMZN)

Analyst: Zane Aw

(Current Price: US$134.91) – TECHNICAL BUY
Buy price: US$134.91 Stop loss: US$130.00
Take profit 1: US$146.00 Take profit 2: US$158.00


Singapore shares took a breather from a six-day winning streak to finish lower on Wednesday (Aug 30), bucking regional gains and snubbing Wall Street’s upbeat overnight showing. 1.4 billion securities worth S$964.8 million changed hands on Wednesday. Gainers trounced losers, with 291 counters up and 254, down. Losses were led by the banking trio DBS, UOB and OCBC. Frasers Centrepoint Trust inched up S$0.02 or 0.9 per cent to S$2.23. The manager on Wednesday said the real estate investment trust will divest retail mall Changi City Point for S$338 million to an unrelated third party. The proceeds will be used to pare debts. Singtel closed unchanged at S$2.36. The counter was the day’s third most active with 26 million shares done.

THE S&P 500 and Nasdaq closed higher on Wednesday as fresh economic data signaled a cooling US economy, reinforcing expectations the Federal Reserve will pause rate hikes in September. The S&P 500 index reached its highest in nearly three weeks after an ADP National Employment report showed private payrolls increased by 177,000 jobs in August, compared with estimates of 195,000, suggesting a softening labour market. Fresh gross domestic product numbers showed the US economy expanded 2.1 per cent in the second quarter, slower than a preliminary estimate of a 2.4 per cent growth. The Nasdaq gained 0.54 per cent to 14,019.31 points, while Dow Jones Industrial Average rose 0.11 per cent to 34,890.77 points.

Top gainers & losers

Factsheets


EVENTS OF THE WEEK

Factsheets


SG

The closing date for the offer to acquire and delist Penguin International has been extended for the sixth and final time to 5.30 pm on Sep 25. The offeror “does not intend to extend the offer beyond the final closing date”, the shipbuilder said in a bourse filing on Wednesday (Aug 30). Aleph Tav, a consortium comprising Penguin’s executive chairman Jeffrey Hing, managing director James Tham, and a special-purpose vehicle under private equity firm Dymon Asia, is the offeror.It is the consortium’s second attempt to take the shipbuilder private, following an unsuccessful bid in 2021. The offer, priced at S$0.83 per share, was set to close on Thursday. As at 6 pm on Wednesday, the consortium had a resultant shareholding of 88.83 per cent of Penguin – still below the 90 per cent shareholding threshold required for compulsory acquisition to kick in.

Hotel group Shangri-La Asia posted a net profit of US$131.4 million for its first half ended Jun 30, 2023, from a loss of US$158.2 million the same period last year. This was mainly due to the robust recovery of its hotel business, particularly in Hong Kong and mainland China, which experienced strong demand following the easing of cross-border restrictions earlier this year, the company said on Wednesday (Aug 30). Earnings per share stood at 3.688 US cents for the half-year period, reversing from a loss of 4.429 cents the previous year. Revenue for H1 rose 60.3 per cent to US$1 billion, from US$627.5 million a year earlier. The combined effects of rebounding travel activities, relaxed pandemic related restrictions, and pent-up consumer demand catalysed the revenue growth during the period, the company said. No dividend was declared for the half year, unchanged from the year before.

Frasers Centrepoint Trust (FCT) will divest retail mall Changi City Point for S$338 million to an unrelated third party. The capital gain on the property is estimated at S$20 million, after taking into account the property’s independent valuation of S$325 million as at Jul 31, its manager said on Wednesday (Aug 30). Changi City Point, which comprises three storeys and one basement, has a net lettable area spanning 208,453 square feet (sq ft) and gross floor area of 306,378 sq ft. It has a 60-year lease which started on Apr 30, 2009. The mall is located at 5 Changi Business Park Central 1 and is connected to Expo MRT station. This train stop also serves as an interchange station between the Downtown Line and the East-West Line, which goes to Changi Airport. The property has 128 tenants, including key tenants FairPrice Finest and Daiso. Total shopper traffic stood at about 7.5 million for the period between October 2021 and September 2022. The purchaser, which was not named, will pay a deposit of S$16.9 million for the property after signing the sales and purchase agreement on Aug 29. The remaining balance will be paid when the transaction is completed on Nov 15, 2023.

US

Jack Daniel’s maker Brown-Forman missed quarterly profit expectations on Wednesday (Aug 30), hurt by higher input costs and sluggish demand for its pricier whiskeys like Woodford Reserve and Gentleman Jack in the US. Shares of the company were down about 4 per cent in pre-market trade as its net sales in the first quarter also fell marginally short of analysts’ expectations. Higher input costs, including for agave, grains and wood, took a toll on the spirits maker, even as shipment volumes declined in the United States after wholesalers worked to trim inventories. Excluding items, Brown-Forman earned 48 US cents per share, compared with a profit estimate of 53 cents per share, as per Refinitiv data. Advertising expenses in the quarter rose 19 per cent, while overall expenses were up 14 per cent as it also battled a tough labour market. The company has increased the prices of its spirits between 2 per cent and 3 per cent year on year, in a bid to ease the damage to its margins as a fallout of supply-chain and input-cost issues that peaked in the last fiscal.

HP Inc fell the most in more than three years after cutting its profit outlook and acknowledging that a rebound in personal-computer demand isn’t coming as quickly as hoped. The Palo Alto, California-based computer supplier pared back its adjusted profit forecast to a range of US$3.23 to US$3.25 a share, down from US$3.30 to US$3.50. It also reduced its outlook for full-year cash flow. Shares plunged as much as 11 per cent as trading got underway in New York on Wednesday (Aug 30), the most since May 2020. PC makers have been struggling to stage a comeback since sales fell off a cliff in a post-pandemic bust. HP had been hoping for a more robust recovery in the second half of 2023 with back-to-school and holiday seasons bolstering sales. Tuesday’s outlook cuts have instead thrown the timing of any significant rebound into question.

US food and beverage maker PepsiCo began building a snack factory in Indonesia’s West Java on Wednesday (Aug 30), marking its return to South-east Asia’s largest economy after splitting with a local partner two years ago. The factory, part of PepsiCo’s US$200 million commitment to invest in Indonesia over a 10-year period, is expected to start producing snacks by 2025. PepsiCo’s affiliate Fritolay Netherlands Holding BV and Indofood CBP, a unit of Indonesia’s largest food company Indofood Group, ended a 30-year joint venture (JV) in 2021 without providing any reason, when Indofood bought PepsiCo’s minority stake. The JV at the time had manufactured a range of snacks under brands such as Lay’s, Cheetos and Doritos. Building the new factory without a local partner, PepsiCo pledged to source most raw materials for its snacks, including corn and palm oil, from sustainable sources and to use renewable power sources.

Apple has set Sep 12 as the date for its biggest product-upgrade event of the year, when it’s set to unveil the iPhone 15 line and next-generation smartwatches. The company announced the plans on its website and via e-mail under the tagline “Wonderlust”. The presentation will be streamed online at 10.00 am Pacific, with an accompanying event at Apple’s Steve Jobs Theater in Cupertino, California. Apple is under more pressure than usual with this iPhone launch. Its sales have slid for three straight quarters as the company contends with shaky demand for smartphones and other devices. The new products should help restore growth this holiday season – Apple’s biggest sales period of the year. Together, the iPhone and Apple Watch bring in the majority of the tech giant’s revenue.

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


RESEARCH REPORTS

PSR Stocks Coverage

Factsheets

Factsheets


For more information, please visit:

https://www.stocksbnb.com/singapore-stocks-coverage/


Upcoming Webinars

Guest Presentation by Sunpower Group Limited [NEW]

Date & Time: 5 Sep 2023 | 12pm – 1pm

Register: https://tinyurl.com/33cua346


Guest Presentation by Elite Commercial REIT

Date & Time: 8 Sept 2023 | 7pm – 8pm

Register: https://tinyurl.com/544xs5v6


Guest Presentation by TDCX

Date & Time: 13 Sept 2023 | 12pm – 1pm

Register: https://tinyurl.com/4xwwexvx


Guest Presentation by CNMC Goldmine Holdings Limited [NEW]

Date & Time: 15 Sept 2023 | 12pm – 1pm

Register: https://tinyurl.com/2xp3fy7c


Guest Presentation by PropNex Limited [NEW]

Date & Time: 19 Sept 2023 | 12pm – 1pm

Register: https://tinyurl.com/4subthpr


Guest Presentation by ComfortDelGro Corporation Limited

Date & Time: 20 Sept 2023 | 12pm – 1pm

Register: https://tinyurl.com/mr27xw2r


POEMS Podcast:

Research Videos

Weekly Market Outlook: Nvidia, Tesla, TDCX, Grab, Singtel, Netlink, SG Weekly & More…!
Date: 28 August 2023
Click here for more on Market Outlook.
Sign up for our webinars here, and be among the first to receive economy and market updates.

PHILLIP RESEARCH IN 3 MINS

Phillip Research in 3 minutes: #29 Keppel Corporation; Initiation
Click here for more on Phillip in 3 mins.

Follow our Socials

Facebook Social Icon Instagram Icon Twitter Social Icon Youtube Social Icon Linkedin Social Icon TikTok Social Icon Spotify Social Icon

Join our Singapore Equity Research Community on POEMS Mobile 3 App for the latest research reports, market updates, insights and more

Click to join!

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