Daily Morning Note – 4 June 2021
U.S. equities fell Thursday as investors digested a raft of economic data and President Joe Biden’s indication that he may be open to a lower corporate tax rate than 28%.
The S&P 500 rose from session lows after Biden was said to have pitched a 15% minimum tax on U.S. corporations as a way to fund a bipartisan infrastructure package. However, the bounce wasn’t enough to erase earlier declines on concerns the Federal Reserve may withdraw its support sooner than expected. An ADP report showed payrolls at U.S. firms gained by the most in nearly a year, while additional figures on the economic health of the services sector rose to the highest on record.
City Developments Limited (CDL) has applied for an initial public offering (IPO) of a real estate investment trust (Reit), which could raise some £500 million (S$940 million) on the Singapore Exchange, Bloomberg has reported. The Reit, which aims to list in Q3, will have a portfolio size of about £1.8 billion, sources told Bloomberg on Thursday. Bloomberg noted that a CDL representative declined comment.
Ascendas real estate investment trust (Reit) will divest three logistics properties in Australia for a total of A$125.1 million (S$128.7 million). The sale price is around 16.8 per cent higher than the total market valuations of the properties of A$107.1 million as at Dec 31, 2020. The divestments are expected to be completed by Q3 this year, said the Reit’s manager in a statement on Thursday.
UMS Holdings’ offer for Catalist-listed JEP Holdings has closed with valid acceptances representing 71.66 per cent of the total number of JEP’s shares, announced UMS in a filing on Thursday morning. The mandatory unconditional cash offer, with a final offer price of S$0.20 per share, closed at 5.30pm on June 2. UMS had triggered the offer for shares in JEP in April, after a stake purchase from JEP executive director Zee Hoong Huay took its cumulative interest in the machining and engineering service provider to 53.8 per cent.
Mainboard-listed KTL Global has proposed to acquire all 200,000 shares of Tianci Agritech for S$200,000, as part of broader plans to diversify into the business of fresh food distribution in Singapore. Locally incorporated in April 2021, Tianci is a producer and distributor of vegetables and fruits. Its sole director, Chin Teck Oon, is also an executive director at KTL Global. Tianci’s shares are held entirely by businessman Phuah Kin Huat, an acquaintance of Mr Chin.
As the demand for chips continue to outstrip supply, carmakers are no longer the only ones bearing the brunt of the impact. The global chip shortage, which is expected to last till 2022, has now extended to the tech industry, according to partners at Bain & Company in a webinar on Thursday. The automotive industry had pulled back orders in the wake of the pandemic while other industries were increasing orders. As such, capacity slots were “reallocated to much higher margin industries”, said Tom Wendt, partner at Bain & Company.
Microsoft will unveil a new version of its flagship Windows software on June 24, an update that chief executive officer Satya Nadella has termed one of the “most significant” overhauls to the personal computer operating system this decade. The new software will include changes to the design, added opportunities for creators and developers via the Windows app store, and ways to more easily build connections between users and communities they care about, the company said. The software will be rolled out to so-called Windows Insiders who sign up to test new products after the event, and is likely to be released widely this fall.
Apple said on Wednesday its App Store “ecosystem” surged in 2020, fueled by pandemic-hit consumers seeking to stay connected for work, school and play. Apple spotlighted an independent study by Analysis Group indicating billings and sales of digital and physical goods as well as advertising “facilitated” by the App Store worldwide last year was up 24 per cent from 2019 to US$643 billion.
Facebook executives used the company’s annual developer conference to tout new tools for businesses to power the future of digital commerce. The social network on Wednesday introduced a handful of programming updates aimed at helping companies use WhatsApp and Instagram, Facebook’s messaging and photo-sharing apps, to lure new customers and keep existing ones.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Haw Par Corp Ltd
Analyst: Chua Wei Ren
Recommended Action: Technical BUY
Haw Par Corp Ltd (SGX: H02) Strong upside is set to continue once again as recent technical supports the continue bullish view.
Buy spot: 13.57 Stop loss: 12.60 Take profit 1: 14.60 Take profit 2: 15.57
Singapore Airlines Ltd: 2021 mandatory convertible bonds
Credit Analyst: Timothy Ang
– SIA is issuing rights to a 2021 mandatory convertible bond (MCB) to raise S$6.2bn.
– The bond structure may not appeal to bondholders because of its zero coupon and unfixed yield to maturity.
– For equity investors looking for capital gains, however, the MCBs can be used as a leverage to SIA’s potential share-price recovery.
HK Reports – Read up on our Hong Kong reports here
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Date: 31 May 2021
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