Daily Morning Note – 5 July 2019


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US stock markets are closed on 4th July, Thursday in observance of Independence Day.


CISCO System

Recommended Action: Technical SHORT

Cisco’s bullish rise has come to a halt and entered into a range when the price broke into two down candles in May 2019.


Ascott Residence Trust – DPU accretive deal to enlarge asset base by one-third

Recommendation: ACCUMULATE (Downgraded), Last Done: S$1.31

Target Price: S$1.36, Analyst: Natalie Ong

– Proposed ART-AHT merger to be 2.5% DPU accretive and NAV neutral.

– Enlarged presence in APAC region – Australia (+9ppts) and Japan (+5ppts). Debt headroom will increase from c.S$850mn to c.S$1bn.

– The combined entity will be the largest hospitality trust in APAC and eighth largest trust globally, facilitating index inclusion.

– Downgrade to ACCUMULATE due to recent share price appreciation. Target price of $1.36 unchanged.

Facebook Inc- More ads and e-commerce opportunities

Analyst: Edmund Xue

– The shift towards family-oriented content for News Feed on the FB app will improve the machine-learning algorithm for FB and increase its strength of engagement.

– Social commerce will increase monetisation opportunities for Instagram.

– Instagram Stories ads continue to have strong adoption rates.

– FB would be able to maintain its share of digital ad spend with an overhaul of the FB app.


Oil prices fell in thin trade on Thursday, weighed down by data showing a smaller-than-expected draw on US crude stockpiles and worries about the global economy.

European shares closed at their highest in more than a year on Thursday as Italian stocks surged on relief that Rome had avoided European Union disciplinary action and rising expectations of looser monetary policy by major central banks.

The Straits Times Index (STI) finished 4.45 points or 0.1 per cent higher at 3,372.25. Markets were mixed in the Asia-Pacific, with Australia, Japan and South Korea closing higher. Meanwhile, China, Hong Kong and Malaysia ended lower.

THE Accounting and Corporate Regulatory Authority has rejected an application from China Gaoxian Fibre Fabric Holdings for a further extension of time to hold its annual general meeting(AGM) and file its annual return for the financial year ended Dec 31, 2018.

The Hour Glass’s Australian subsidiary has entered into a sale-and-purchase agreement with 190 Edward St (as trustee for BAMPS Trust) to acquire a freehold property in Brisbane, Australia for A$32million (S$30.5 million).

A SUBSIDIARY of food court operator Koufu Group has entered into a joint-venture (JV) agreement to expand the Supertea and R&B Tea brands into Indonesia.

The MSCI Singapore Index outperformed other Asia-Pacific indices in June, posting an8.4 per cent gain.

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

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

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