Daily Morning Note – 31 March 2022

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PHILLIP SUMMARY

Asian stocks looked poised for a cautious open as stalled talks between Russia and Ukraine arrested a two-day slide in oil prices, fanning concerns about inflation and economic growth.

Futures fell in Japan as the yen extended a rally from a six-year low and were little changed in Hong Kong. Australian shares were higher. U.S. contracts ticked up after the S&P 500 closed lower for the first time in five days and the tech-heavy Nasdaq 100 dropped.

Treasuries rose across the curve amid some dip-buying. A brief inversion in a segment of the curve on Tuesday has signaled the prospect of a recession. Oil was steady following a rally back to over $107 a barrel in New York, and the dollar held a retreat.


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BREAKING NEWS


SG

LHN Logistics lodged its preliminary offer document on Wednesday (Mar 30) as its parent company, property player LHN, seeks its spin-off and listing on the Catalist board of the Singapore Exchange (SGX). The document states that part of the gross proceeds raised from the placement will go towards the logistics-services group’s plans to increase its scale of operations by growing its transportation fleet. LHN Logistics intends to buy at least 20 additional prime movers and at least 70 trailers to better support its customers who require cross-border transportation services between Singapore and Malaysia. Such acquisition will be made progressively over a period of 2 years from this year, the document stated.

Property developer City Developments Ltd (CDL) said in a bourse filing early on Wednesday (Mar 30) that it expects to make a “significant gain” from its sale of Tanglin Shopping Centre to Hillthorpe Investments, an investment vehicle of Pacific Eagle Real Estate. CityDev board believes that the sale, which includes 85 strata lots including 2 car parks, will help the company recycle and reallocate its capital in line with the company’s overall strategy to divest some of its assets at a premium to net book value and/or valuation.

Agri-food company Japfa has applied to list its dairy unit in China, AustAsia Investment Holdings, on the mainboard of the Stock Exchange of Hong Kong. As part of a capital reduction exercise related to the listing, Japfa is also proposing a distribution-in-specie of its entire shareholding in AustAsia, which will see eligible shareholders receiving AustAsia shares in proportion to their respective shareholdings in Japfa. No cash outlay is required from Japfa shareholders under the proposed distribution, the company said on Tuesday (Mar 29).

Changi Airport Terminal 2 will reopen in phases from this year, with the number of travellers passing through the airport expected to increase in the coming months. T2’s upgrading had been going on for most of the last two years after it was closed in May 2020 owing to the low passenger numbers caused by the Covid-19 pandemic. Transport Minister S Iswaran said on Wednesday (March 30) that T4, which has also been closed since May 2020, can be reopened at relatively short notice as well.

Comfortdelgro will be investing S$30 million in the research and development of autonomous driving capabilities over the next 5 years. This research and development unit, known as Autonomous Vehicles Centre of Excellence, was set up through its S$100 million venture capital fund, said the transport company in a media statement on Wednesday (Mar 30).

A consortium comprising Far East Organization and Perennial Holdings has offered to buy the iconic Golden Mile Complex for S$700 million, which is S$100 million lower than its reserve price of S$800 million, a source has confirmed with The Business Times. Golden Mile Complex’s collective sale committee (CSC) will now have to convince respective owners of the development with 718 strata-titled units to accept the deal as the offer fell below both the reserve price and an independent valuation of the property.

Watch-listed SMI Vantage has started installing cryptocurrency mining machines in Melaka, and is on track to complete the installation of 3,100 of these machines in South-east Asia by end-May, it said in a bourse filing on Wednesday (Mar 30). The move followed the Mainboard-listed company’s agreement with Hatten Edge, a subsidiary of the Catalist-listed property developer Hatten Land, in January to install cryptocurrency mining machines at a mining data centre in Melaka.


US

Citigroup agreed to sell its India retail banking business for about US$1.6 billion cash to Axis Bank, as the US lender seeks to consolidate its operations in identified markets. Citi will sell its consumer banking businesses including credit cards, retail banking, wealth management and consumer loans, it said in a statement on Wednesday (Mar 30). The transaction also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India), comprising the asset-backed financing business.

The US economy grew robustly in the fourth quarter, the government confirmed on Wednesday, but momentum has slowed significantly amid a surge in Covid-19 infections at the start of the year, snarled supply chains and soaring inflation. Gross domestic product increased at a 6.9 per cent annualised rate, the Commerce Department said in its third estimate of fourth-quarter GDP growth. That was revised slightly down from the 7.0 per cent pace estimated in February. The economy grew at a 2.3 per cent rate in the third quarter. Growth is 3.1 per cent above its pre-pandemic level. Economists polled by Reuters had expected GDP growth would be revised up to a 7.1 per cent rate. The revision to the fourth-quarter GDP reading reflected downgrades to consumer spending and export growth.

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


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