Daily Morning Note – 31 January 2019


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Major stock markets in Asia closed mixed on Wednesday, as investors awaited the start of U.S.-China trade talks later in the day stateside.

US stocks rose sharply on Wednesday after the Federal Reserve kept interest rates unchanged and said it will be “patient” with raising rates moving forward. Strong earnings from Boeing and Apple also boosted the market.

Gold prices rose on Wednesday after the Federal Reserve kept benchmark interest rates unchanged and hinted at a slower pace of monetary policy tightening.

Oil prices rose on Wednesday, boosted by U.S. government data that showed signs of tightening supply, as investors remained concerned about supply disruptions following U.S. sanctions on Venezuela’s oil industry.

Source: CNBC


Ascendas REIT – Grabbing a new tenant

Recommendation: Accumulate (maintained), Last Close Price: $2.72

Target Price: $2.88 (previously $2.78)

– Gross revenue and DPU in line with expectation

– Almost full quarter contribution from Second UK portfolio of 26 logistics assets

– Build-to-suit development for Grab’s new headquarters at one-north

– Maintain ACCUMULATE. Raised target price to $2.88 (previously $2.78) due to higher DPU estimate


Please note that there is no webinar on 4 Feb 2019 due to eve of Lunar New year.

Federal Reserve keeps US interest rate unchanged, says will be ‘patient’. The Federal Reserve left the key US lending rate unchanged on Wednesday, and said it would be “patient” about making any further changes, in the clearest signal yet the central bank has heeded concerns about the economy. And Federal Reserve Chairman Jerome Powell followed that dovish statement by saying “the case for raising rates has weakened somewhat,” given low inflation and amid “cross-currents and risks” buffeting the US economy that will be around for a while.

US private hiring shows solid gains in January: ADP. Private firms added 213,000 jobs in the month, according to the payrolls firm ADP, far stronger than the 170,000 economists were expecting.

US, China resume trade talks with a chill in the air. Top US and Chinese trade officials returned to the bargaining table Wednesday, working to avoid a sharp escalation in the trade war between the world’s two largest economies. Chinese Vice Premier Liu He is leading Beijing’s delegation to the talks, with just a month remaining in a 90-day truce declared in December.

Oil gains on tighter US supply, Venezuela sanctions. Oil prices rose on Wednesday, as US government data that showed signs of tightening supply and investors remained concerned about supply disruptions following US sanctions on Venezuela’s oil industry. US crude futures rose 92 cents to settle at US$54.23 a barrel, a 1.73 per cent gain. Brent crude futures gained 33 cents, or 0.54 per cent, to US$61.65 a barrel.

Singapore competition panel fines 4 hotels S$1.5m for exchanging commercially sensitive information. The competition watchdog issued an infringement decision against the owners and operators of Capri by Fraser Changi City Singapore, Village Hotel Changi and Village Hotel Katong (the Village Hotels), and Crowne Plaza Changi Airport Hotel. Capri’s owners and operator were fined a total of S$1.01 million, while the Village Hotels received a penalty of S$286,610, and Crowne Plaza was fined S$225,293.

Nico Steel invests 3.83m yuan to ramp up production facility in Suzhou, China. The investment went to a new production line and an in-house wastewater treatment and water recycling system. In anticipation of an increase in orders for its proprietary Nico branded metal alloys, the new production line is aimed at raising capacity by another 120 per cent to reach an optimal volume of 44 tonnes of metal alloys per month. The average daily wastewater discharge will also increase in tandem with the three production lines, although at approximately 60 per cent to 350 tonnes per day.

Shareholders block Capital World from issuing settlement shares. Minority shareholders of Catalist-listed Capital World have blocked a bid by the integrated property developer to issue 39 million new shares to convertible bond holder Chong Thim Pheng as part of a settlement agreement. The votes were cast at a shareholder meeting on Monday. Capital World has 1.31 billion issued shares. It proposed the share issuance in November.

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

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