Daily Morning Note – 4 Oct 2019
WEEKLY MARKET OUTLOOK WEBINAR
PHILLIP SUMMARY
Stocks in Asia looked set to end the week with a reprieve, as the wave of poor economic data increased expectations for the Federal Reserve to cut rates this month. Futures edged higher in Japan and Australia, with contracts little changed in Hong Kong. Earlier, the S&P 500 rose the most in a month after climbing back from a drop of more than 1% sparked by the weakest reading on the U.S. services sector in three years. Odds the Fed eases policy further at its next meeting spiked as the data came just after the worst factory numbers in a decade. The yield on 10-year Treasuries dropped for the sixth straight day and the dollar dipped. Elsewhere, oil fell 0.6% to $52.31 a barrel and gold was at $1,505.10 an ounce.
BREAKING NEWS
Bank of Japan (BOJ) deputy governor Masazumi Wakatabe on Thursday said he expects global trade tensions to persist for quite some time and said the central bank will act as appropriate to boost the economy as needed.
American services industries, the main driver of the world’s largest economy, deteriorated unexpectedly in September, falling to the weakest level in three years, according to an industry survey released Thursday.
Wall Street stocks climbed on Thursday after data showing US services-sector activity at a three-year low fuelled expectations that the Federal Reserve would cut interest rates to stem a wider economic downturn.
IYUNO Media Group CEO David (Hyonmoo) Lee on Thursday was named the overall EY Entrepreneur Of The Year (EOY) 2019 Singapore by professional services organisation EY.
ASCENDAS Real Estate Investment Trust (Reit) is acquiring its fourth suburban office property in Australia for A$110.9 million (S$104.4 million), the Reit’s manager announced on Thursday after market close.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
TECHNICAL PULSE
Mapletree Industrial Trust
Recommended Action: Technical BUY
Mapletree Industrial Trust (SGX:ME8U) bullish sentiment is likely to continue based on the technicals
Capitaland
Recommended Action: Technical BUY
Capitaland (SGX: C31) bullish sentiment will return based on the technicals
RESEARCH REPORTS
Singapore Banking Monthly – Fixed deposits growth finally capitulated
Recommendation: Overweight (Maintained)
Analyst: Tin Min Ying
– Singapore’s loans growth for August was stable at 2.2% YoY. Consumer loans contracted for the fifth consecutive month (-1.1% YoY), dragged by weakness in housing loans (-1.1% YoY).
– 3M SIBOR flat MoM at 1.877%, while 3M SOR dipped 3 bps to 1.690%.
– In line with falling interest rates, CASA growth recovered to 1.4% YoY after almost a year of contraction; while FD fell from September’s decade-high growth (23.1% YoY) to 18.5% YoY.
– In September, SGX’s SDAV and derivative volume fell 4.0% YoY (1QFY20 -2.1%) and around -5.6% YoY (1QFY20 +3.5%) respectively.
– Maintain the Singapore Banking Sector at Overweight. The banks are offering dividend yield of 4.6% to 5.0%, well capitalised and enjoying 5-9% earnings growth.
GSH Corporation Limited – Properties fit for a King
Credit View, Research Analyst – Timothy Ang
GSH Corporation Limited (GSH) is a Singapore-listed real estate developer in Southeast Asia. As at 30 June 2019, its asset size amounts to S$1.1bn.
(+) Management largely vested in GSH’s bonds and shares
(+) Healthy sales from development properties despite high supply in Malaysia
(+/-) Stable recurring income from food logistics and hospitality businesses, however, impacted by increased competition
(+) Manageable gearing levels allow room for financing planned developments
Webinar Of The Week
Market Outlook: : (PSR) 2019-09-30 Lendlease, Venture, REITs monthly, China Weekly, Technicals
Date: 30 September 2019
Phillip Research in 3 minutes: #14- Singapore Banking Sector
Updates summarised in 3 minutes
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