Daily Morning Note – 6 June 2019


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Asian equity futures may open mixed, with Nikkei futures slightly up, while the Hang Seng may open down. U.S. stocks climbed on optimism Mexican tariffswill be avoided.

Treasuries rose as a weak private-jobs report bolstered bets the Fed will ease, outweighing solid service-industries figures. The spread between 2- and 10-year yields reached the widest since November.

The dollar rose against all G-10 currencies except the kiwi. Oil entered a bear market after U.S. supplies jumped the most in almost 30 years.


United Overseas Bank Ltd

Current Sentiment: Technical Buy


Singapore Banking Monthly – Slow but sustainable growth

Recommendation: Overweight (Maintained), Analyst: Tin Min Ying

– Singapore loan growth slowed further to 1.4% YoY. Consumer loans contracted for the first time in decades, hammered by persistent weakness in housing loans.

– Domestic deposits rose 7.1% YoY, held up by fixed deposit growth of 21.6% YoY, the fastest in almost twelve years. CASA deposits continues to contract at -1.1% YoY.

– 3-month SIBOR and SOR rose 6.2bps and 8.0bps to 2.007% and 2.052% respectively.

– Maintain the Singapore Banking Sector at Overweight. While the trade war affects investor sentiments in the near term, we believe the banks’ fundamentals remain intact to withstand risks and deliver growth on a sustained basis.


The European Central Bank will try to give an ailing euro zone economy a boost on Thursday and may even set the stage for more action later this year as an escalating global trade war saps growth and unravels the benefits of years of ECB stimulus.

Oil prices fell on Wednesday, with West Texas Intermediate crude futures (WTI) dropping to its lowest since January after US crude inventories unexpectedly surged, adding to concerns about slowing global growth.

Asian markets rose on Wednesday, tracking rallies on Wall Street after the US Federal Reserve chief indicated greater openness to lowering interest rates and acknowledged the impact of trade tensions on growth.

Wall Street stocks rose for a second straight session on Wednesday, with solid data on the US services sector offsetting a weak private sector hiring report.

Tokyo stocks opened higher on Wednesday extending rallies on Wall Street, as the US Federal Reserve chief signalled a greater openness to cutting interest rates.

CHALLENGER Technologies said on Tuesday night that the Singapore Exchange has no objection to its delisting, subject to compliance with listing rules.

SIX more mainboard-listed companies have announced their addition to the Singapore Exchange’s watch-list with effect from June 6, due to not meeting minimum trading price (MTP) requirements.

European stock markets crept higher on Wednesday as defensive shares gained ground, but rising tensions between Italy and the European Commission over the country’s debt dampened sentiment.

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

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