Daily Morning Note – 5 Aug 2020


Asian stocks looked set for modest declines Wednesday as investors mulled the progress of stimulus talks in Washington and reports of a plan to review the U.S.-China trade deal. Treasuries pushed higher.

Futures pointed lower in Japan, Australia and Hong Kong. S&P 500 contracts were little changed after the index wavered between small losses and gains throughout Tuesday before closing modestly higher. The dollar weakened against major peers. Gold rallied to above $2,000 an ounce. Ten-year Treasury yields fell to their lowest since March.


Capitaland Commercial Trust, CapitaLand Mall Trust and Ascott Residence Trust have emerged at the top of the latest Singapore Governance and Transparency Index (SGTI) ranking of real estate investment trusts (Reits) and trusts. The SGTI panel, which also has a ranking of Singapore-listed companies, had observed an improvement in the governance of Reits and trusts, going by scores published on Tuesday. This year, with 45 Reits and trusts assessed, saw a 6.2-point increase in mean scores over the previous year: from 78.6 to 84.8.

Frasers Logistics & Commercial Trust (FLCT) is looking to acquire two properties in Australia and the UK from its sponsor Frasers Property as well as sell its remaining half stake in a cold storage facility in Australia, said the trust’s manager, which has also released its latest business update indicating that the coronavirus pandemic has not had a material impact on FLCT’s portfolio. In a bourse filing late Monday night, the manager announced that FLCT has proposed to acquire a logistics property in the Australian state of Victoria as well as a business park in Thames Valley in the UK for a total of about S$89.9 million in cash, from Frasers Property.

The Singapore Exchange (SGX) is set to launch two international real estate investment trust (Reit) futures products, based on indices tracking Reits listed in Singapore, Hong Kong, Malaysia and Thailand. These products will be the first international Reit futures in Asia. On Aug 24, SGX will launch the SGX FTSE EPRA Nareit Asia ex-Japan Index Futures, as well as the SGX iEdge S-REIT Leaders Index Futures, the bourse said in a Tuesday press release after market close.

Yanlord (China) Investment Group, a unit of property developer Yanlord, has inked an investment agreement of up to seven billion yuan (S$1.4 billion) with an affiliate of Singapore’s sovereign wealth fund GIC, to co-invest in China residential projects. Yanlord will own 51 per cent of each of the project companies and joint venture companies to be co-invested in, while the GIC affiliate will own the remainder, the mainboard-listed company said in a bourse filing after the market close.

Property developer OUE posted a S$207.2 million net loss for the six months ended June, plunging the mainboard-listed company into the red from a S$61.9 million net profit a year ago. The steep loss was mainly due to a S$310 million fair value loss on the US Bank Tower, which an OUE unit sold for US$430 million on July 17. The fair value loss represents the discount of the sale price to the property’s book value as of end-2019.

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


    Hang Seng Index

    Analyst: Chua Wei Ren

    Recommended Action: Technical BUY

    Hang Seng Index had a sell-off just as we expected on 8th July. Based on the recent technicals, the Hang Seng Index will rally to form the last leg of the corrective wave E

    >> Read more technical reports


    Koufu Group Limited – Food as fuel for growth

    Recommendation: BUY (Initiation), Last Done: S$0.670

    Target Price: S$0.80, Analyst: Terence Chua

    – New integrated facility operational in 3Q20 will consolidate and expand Group’s central kitchen capacity boosting overall operational efficiency.

    – Potential special dividend from the sale of its existing central kitchen property when they move into their new integrated facility.

    – We like Koufu for their strong cash flow generation, defensive balance sheet and high ROE of 20.6% and 22.3% for FY21e and FY22e respectively.

    – Initiate coverage with BUY recommendation and target price of S$0.80. Valued at 18.5x FY21e PE, sector average.

    >> Read more research reports

    HK Reports – Read up on our Hong Kong reports here


    Webinar Of The Week

    Market Outlook: Market Outlook: SG Banking Monthly, SG Bonds Weekly and SG Strategy 3Q20 (with stock picks)

    Date: 06 July 2020

    For more on Market Outlook

    Phillip Research in 3 minutes: #25 – Prime US REIT; Initiation

    For more videos on Phillip in 3 Mins

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

    The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.
    Confidentiality Note
    This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.


Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  


Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com