Daily Morning Note – 4 October 2018

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YOUR PHILLIP SUMMARY

Ten-year U.S. Treasury yields rose to the highest level since 2011 amid growing optimism about the U.S. economy. The rate on 30-year securities reached a four-year high and the dollar gained, driven by investor appetite for riskier assets. Federal Reserve Chairman Jerome Powell said the central bank has a long way to go yet before it gets interest rates to where they are neither restrictive nor accommodative. “Interest rates are still acommodative, but we’re gradually moving to a place where they will be neutral,” he added. “We may go past neutral, but we’re a long way from neutral at this point, probably.” India’s central bank eased norms for state-run refiners to borrow money from overseas markets, in a bid to support the rupee by stemming dollar demand from oil importers.


RESEARCH REPORT

Ascendas REIT – Increasing footprint in the United Kingdom

Recommendation: Accumulate (Maintained), Last Close Price: $2.60

Target Price: $2.82 (previously $2.96), Analyst: Richard Leow

– Completed aggregate S$425.8mn acquisitions in Australia and UK during 2Q
FY18/19

– Disposal in Singapore worth S$13.6mn, recognising a gain of S$2mn

– Placement of 178mn New Units in September increased unit base by 6.1%

– Proposed acquisition of second portfolio of 26 logistics properties in UK for
S$549.2mn

– Maintain Accumulate; new target price of $2.82 (previously $2.96)

BREAKING NEWS

CapitaLand secures S$300m sustainability-linked loan from DBS. The multi-currency loan is linked to the developer’s listing on the Dow Jones Sustainability World Index (DJSI World), which tracks established firms in areas such as environmental, social and governance (ESG) efforts. CapitaLand is able to use the loan for general corporate purposes.

Mapletree acquires Prologis logistics portfolio for US$1.1 billion. The assets are located in distribution centres within major logistics markets such as Chicago, Dallas and Seattle in the US, as well as France, Germany and Poland, Mapletree said on Wednesday.

Swiber seeks revival from US$200m equity deal with Seaspan. A binding term sheet signed on Wednesday between the two parties called upon Seaspan to inject an initial US$20 million in cash for new ordinary shares amounting to 80 per cent of Swiber’s enlarged shareholding. Seaspan will pump in another US$180 million of equity into Swiber’s subsidiary, Equatoriale Energy Pte Ltd.

Serial System announces S$0.01 special dividend after selling laundry business. Serial System said on Wednesday evening that it had received about A$40.2 million (S$39.6 million) for the sale of its entire 27.34 per cent stake in SPL Holdings (Australia), a commercial laundry business.

StarHub to let 300 full-time employees go, CEO cites ‘industry pressures’. Other roles will also be axed in the “operational efficiency programme” announced on Wednesday evening, StarHub said in a statement, citing “ongoing natural attrition” and a tightening of contractor positions. It said that the cuts “will primarily affect non-customer-facing functions”.

Ayondo, Huanying International to cooperate on trading opportunities in China. Under the tie-up, the duo will partner to provide a full suite of products including equities, indices, forex, commodities to Huanying’s client base through Ayondo’s contract-for-difference (CFD) TradeHub platform. In addition, Ayondo will also provide Huanying with execution and risk management services.

Alliance Mineral secures A$20m debt facility, A$20m standby credit for ASX dual listing. Tawana has secured a A$20 million secured debt facility from Tribeca Investment Partners and other investors, which will be used to repay its existing facility, and for working capital purposes. Separately, Alliance’s board has also consented for Tawana to secure a conditional A$20 million standby line of credit on behalf of the merged group.

Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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