DAILY MORNING NOTE | 4 September 2023

Technical Monthly August 2023

Analyst: Zane Aw

– Review of asset classes performance in August – Almost all ETFs were down between 1 to 11%, only gainer was ETF tracking Oil (XOP) which was up nearly 4%

– For the current trends of the ETFs tracking the various asset classes, that of S&P 500, Oil, Bitcoin, Singapore Equities and Hang Seng Index are in a range consolidation phase. US Treasury Bonds and Gold remain in a downtrend

– In terms of the outlook for these ETFs, S&P 500, Oil, Bitcoin, Singapore Equities and Hang Seng Index could remain in their respective range consolidation phases should technical patterns hold while US Treasury Bonds and Gold could continue their downtrend

Week 36 Equity Strategy: US nonfarm payroll employment climbed 187K in August, while July’s data was revised down to 157K. On the other hand, the labour force has expanded. This helped push the unemployment rate up to 3.8%, the highest level since Feb 2022. The average hourly earnings climbed a slower 0.2% MoM in August. The average for July and August was 4.0% on an annualized basis, not far from the 12-month change at 4.3%. While not pointing to renewed inflationary pressures, we think inflation data would be the key in FOMC’s Sep rate decision. The market is expecting a 25bp hike in Sep.
The Chinese government rolled out more supportive policies for the property sector and to support the RMB. The PBoC will cut commercial bank foreign exchange deposits in reserve to 4% from 6%, starting Sep 15. Guangzhou and Shenzhen broadened the definition of first-time mortgage. Beijing and Shanghai announced the easing of mortgage policies to lower down-payments for homebuyers and allow mortgage refinancing. This could reduce secondary supply and stimulate demand in tier-1 and tier-2 cities. We see a recovery in the Chinese property sector to also benefit commodities such as copper and iron ore.

Peggy Mak
Research Manager
Phillip Securities Research Pte Ltd

Singapore shares ended a shortened trading week with gains on Thursday (Aug 31), ahead of a public holiday for the presidential election on Friday. Singapore stocks advanced 13.08 points or 0.4 per cent to finish the day at 3,233.30, taking its cue from overnight gains on Wall Street. The index added 43.4 points or 1.3 per cent over the week.

US stocks mostly advanced on Friday (Sep 1), as traders digested a weaker jobs report that raised the chances of an end to Federal Reserve interest rate hikes in the coming months.
The Dow Jones Industrial Average finished 0.3 per cent higher at 34,837.71, while the broad-based S&P 500 rose 0.2 per cent to 4,515.77. The tech-heavy Nasdaq Composite Index, meanwhile, was almost flat at 14,031.81.

Top gainers & losers





Tharman Shanmugaratnam’s landslide win in Friday’s presidential polls is a “collective victory for Singapore”.

City Developments Limited CDL on Thursday (Aug 31) announced that it has acquired a hotel in Osaka, Japan for 8.5 billion yen (S$78.5 million). The hotel, Bespoke Hotel Shinsaibashi, is a freehold, 256-room property located in Osaka’s Shinsaibashi district, a major shopping area.

Resorts World Sentosa (RWS) made a S$300,000 contribution to Food from the Heart (FFTH) on Monday (Sep 4) to an initiative supporting the purchase of fresh local produce. The partnership – RWS Eat Well @ Community Shop initiative – aims to improve access to fresh and nutritious food for lower-income families.


The US dollar gained against the euro and Japanese yen on Friday (Sep 1) after the August jobs report showed a still strong labour market, despite some signs of deterioration. Employers added 187,000 jobs in August, above expectations for a 170,000 gain. But data for July was revised lower to show 157,000 jobs added instead of the previously reported 187,000. The unemployment rate rose to 3.8 per cent, above the expected 3.5 per cent. The dollar index was last up 0.58 per cent at 104.23.

US Construction spending increased solidly in July as a shortage of houses on the market boosted outlays on single-family housing projects. The Commerce Department said on Friday (Sep 1) that construction spending rose 0.7 per cent. Data for June was revised slightly higher to show construction spending increasing 0.6 per cent instead of 0.5 per cent as previously reported. Economists polled by Reuters had forecast construction spending increasing 0.5 per cent.

Country Garden Holdings is delaying a deadline again for the holders of a yuan bond to vote on several proposals regarding the note repayment, in its latest struggle to avoid what would be its maiden bond default.

Robinhood Markets bought back US$605.7 million of company stock that had been controlled by Sam Bankman-Fried and was caught up in a contentious ownership fight. The purchase from the US Marshal Service, which was completed on Thursday (Aug 31), involved about 55.3 million shares of the company’s Class A common stock that had been seized by the government, Robinhood said in a regulatory filing on Friday.

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


Salesforce Inc – Profit outlook raised

Recommendation: ACCUMULATE (Maintained); TP: US$242.00

Analyst: Ambrish Shah

– 2Q24 revenue was in line with our expectations, while earnings exceeded expectations. 1H24 revenue/PATMI was at 49%/55% of our FY24e forecasts. In 2Q24, PATMI spiked by 19-fold YoY driven by higher operating leverage.

– ​For FY24e, Salesforce boosted its revenue outlook to US$34.75bn from the prev. US$34.6bn as it benefits from AI-related demand and a recent price hike of 9% across its cloud products. The company also raised its GAAP EPS outlook to US$3.51 from US$2.68 led by cost containment efforts.

– ​We maintain ACCUMULATE with a raised DCF target price of US$242.00 (prev. US$226.00), with a WACC of 7% and terminal growth of 4%. We increase our FY24e revenue/PATMI estimates by 1%/30% to reflect benefits from the price hike and lower expenses. We believe Salesforce is well-positioned to benefit from cloud-based digital transformation trends as companies look to form a more holistic view of their customer data to provide better customer experiences.

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