Singapore shares closed a rather bumpy week by extending its third straight day of losses after panic set in as the probability of a recession heightened amid a tightening trajectory by central banks. Weak global macro data on the back of rising cost pressures and supply chain disruptions further hurt trading sentiments. The key Straits Times Index (STI) slipped 6.62 points or 0.21 per cent to 3,095.59 after Wall Street capped its worst half-yearly trading in more than half a century overnight. To add fuel to the fire, the STI dipped below the 252 long-term EMA (exponential moving average), officially putting the index on a bearish trend. The rejection of the 22-EMA accelerated downside pressure on Jun 30.

Wall Street stocks shrugged off early weakness to begin the second half of 2022 on a solid note on Friday, but record eurozone inflation underscored the potential for more turbulence ahead. New York equities spent much of the morning in the red, absorbing an industry survey showing slowing growth in the manufacturing sector. But US markets reversed course in the final hours of trading, rallying into the Independence Day holiday weekend amid hopes for a better second half of the year.


Top gainers & losers



The iEdge S-Reit Index held resilient for the first half of 2022, generating flat total returns compared to the FTSE EPRA Nareit Developed Index (a benchmark for global Reits) which declined 18 per cent. During the period, the S-Reits and property trusts sector in Singapore saw S$359 million of net institutional outflows and S$447 million of net retail inflows. Hospitality was the best performing sub-segment in H1 2022. The 5 hospitality trusts averaged 17 per cent total returns and garnered S$62 million of net institutional inflows. Aside from hospitality trusts, diversified S-Reits and some industrial and retail S-Reits were also among the top performing S-Reits in the first half of 2022. The 9 trusts which outperformed the broader iEdge S-Reit Index in H1 2022 include Frasers Hospitality Trust, Ascott Residence, Far East Hospitality Trust, CDL Hospitality Trusts, Mapletree North Asia Commercial Trust, Suntec Reit, CapitaLand Integrated Commercial Trust, Sabana Industrial Reit and Frasers Centrepoint Trust.

Union Gas Holdings has agreed to further extend the maturity date for S$1 million worth of convertible bonds issued by ADERA AI, as the latter is in the process of undergoing a public offering and listing on “certain stock exchanges”. In a bourse filing late on Friday (Jul 1), Union Gas said the maturity date of the bond has been further extended by 3 months to Sept 30, 2022, but did not indicate which exchange ADERA AI is seeking to list on. Singapore-based ADERA AI is principally in the business of providing secure data handling services to clients in Singapore, Hong Kong, and Macau. It offers solutions for the transformation of physical documents to secured data using intelligent data capture, recognition scanning, additional validation technologies and archival services. A wholly-owned subsidiary of Union Gas entered into the agreement last January to subscribe for the convertible bonds, which have an internal rate of return of 10 per cent per annum, and were scheduled to be redeemed 1 year after the closing date. Union Gas announced in March this year that the maturity date had been extended to June 30, 2022, in view of the potential public offering and listing of the issuer. If ADERA AI undergoes a public offering and listing on “certain stock exchanges” prior to the revised Sept 30 maturity date, the bonds shall be converted into shares at a 30 per cent discount to the public offering price.

Creative Technology is expecting its revenue for the 2HFY2022 ended June to come in below its target. The company is estimating that revenue for the second-half of the year will be around US$27 million ($37.6 million). The company had previously announced that it expects to report an operating loss during the same period. According to the company, its revenue was negatively impacted by the “uncertain economic conditions” due to the ongoing global events. These include the pandemic-related lockdowns in China, the Russo-Ukraine war and related sanctions, as well as inflation rates. The company will release its results for the FY2022 in August. Shares of Creative Technology closed 5 cents lower or 2.34% down at $2.09 on July 1.


Pessimism about the global economic outlook boosted demand for the safe-haven US dollar on Friday (Jul 1) while the Australian dollar, a proxy for global growth, sank to a 2-year low. Rampant inflation and a rush by central banks to raise rates and stem the flow of cheap money has fuelled sell-offs across markets and lifted assets seen as safer bets. The dollar gained on Friday even as concerns about an economic downturn sent benchmark 10-year US Treasury yields to 1-month lows. The greenback is being swayed between concerns that the Federal Reserve will continue to hike rates aggressively to blunt soaring prices, and the likelihood that this will hurt the economy. Expectations for interest rate hikes in the US have fallen, with traders now pricing in a peak of 3.32 per cent in March, down from previous estimates of around 4 per cent before the Fed’s Jun 14-15 meeting. The Fed’s benchmark rate is currently 1.58 per cent. The dollar index gained 0.36 per cent against a basket of currencies to 105.12. It is holding just below a 20-year high of 105.79 reached on Jun 15.

Tesla Inc delivered 17.9% fewer electric vehicles in the second quarter from the previous quarter, as China’s COVID 19-related shutdown disrupted its production and supply chain. The world’s biggest electric car maker said on Saturday that it delivered 254,695 vehicles in the April to June period, compared with 310,048 vehicles in the preceding quarter, ending a nearly two-year-long run of record quarterly deliveries. A resurgence in COVID-19 cases in China had forced Tesla to temporarily suspend production at its Shanghai factory and also affected suppliers’ facilities in the country. Tesla is ramping up production at the Shanghai factory with the easing of the COVID-19 lockdown, which will help boost deliveries in the second half. Early in June, Chief Executive Officer Elon Musk told executives that he had a “super bad feeling” about the economy and needed to cut about 10% of staff at the electric car maker. Musk has said demand for Tesla vehicles remains strong, but supply-chain challenges still remain.

Exxon Mobil Corp on Friday signaled that skyrocketing margins from fuel and crude sales could generate a record quarterly profit, according to a securities filing. Energy prices have shot up this year with oil selling for more than $105 per barrel and gasoline at about $5 per gallon in the United States. The enormous earnings are likely to ignite new calls for windfall profit taxes. The largest U.S. oil producer projected a sequential increase of about $7.4 billion in operating profits compared with the first quarter. In the first quarter, Exxon posted an $8.8 billion profit, excluding a Russia writedown. The filing indicates a potential profit of more than $16 billion for the second quarter. The company’s peak quarterly profit was $15.9 billion in 2012. The filing showed Exxon expects higher oil and gas prices will add about $2.9 billion to results. Margins from selling gasoline and diesel will add another $4.5 billion to operating profits.

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


Singapore Banking Monthly – Interest rates continue to rise in June
Recommendation: Overweight (Maintained)
Analyst: Glenn Thum
– June 3M-SIBOR was up by 28bps MoM, the highest since Feb 2020.
– SGX’s 1H22 top five equity index futures turnover was up 13.9% YoY. We estimate SGX securities and derivatives volumes from 1H22 was down 3% and up 14% YoY respectively.
– Maintain OVERWEIGHT. We remain positive on banks. Bank dividend yields are attractive with upside surprise due to excess capital ratios. Stable economic conditions and rising interest rates remain tailwinds for the banking sector. SGX is another beneficiary of higher interest rates. Pressure points for the banks will be higher staff cost and nudge in general provisioning due to weaker economic assumptions.

ESR-LOGOS REIT – Supporting Tailwinds from merger with ARA LOGOS
Analyst: Shawn Sng
– The merger with ARA LOGOS Logistics Trust increases the portfolio’s exposure to its high spec industrial and logistics assets to capture growing demand in this sector. ESR-LOGOS REIT will also be able to leverage on its sponsor ESR group’s established operations platform to tap into overseas markets and strengthen its portfolio quality by addressing its shorter land leases with more freehold or longer land leases properties.
– While there were no financial updates given post-merger, the pro forma credit outlook shows ESR-LOGOS REIT gearing is at 40.8% which is lower than the MAS gearing limit of 50% which gives the REIT sufficient debt headroom of $941.9mn for refinancing.
– A comparable bond for the recent issue ESR-LOGOS REIT 5.5% Perpetual would be Aims APAC REIT 5.375% Perpetual which has a lower yield to worst of 5.18%. The ESR offering also has a slightly longer call date at 9 June 2027 (ESR 5.5% Perp) vs Aims’ 1 September 2026 (Aims APAC 5.375% Perp). High-yield seeking investors may consider the ESR-LOGOS REIT 5.5% Perpetual.

POEMS Podcast:

Research Videos

Weekly Market Outlook: Adobe Inc, Del Monte Pacific, HRnetGroup Limited, SGWeekly and …
Date: 27 June 2022
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 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!


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


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