Daily Morning Note – 5 May 2020

PHILLIP SUMMARY

Asian stocks are poised for modest gains, with a few markets closed for holidays, following a late-session advance on Wall Street. Crude oil gained for a fourth consecutive day.

Equity futures were higher in Australia and Hong Kong. Trading is likely to be subdued with markets closed in Japan, China and South Korea. Equities will likely remain under pressure amid simmering U.S.-China tensions and uncertainty over the impact of some American states beginning to re-open. S&P 500 Index futures ticked higher at the open after the benchmark staged a turnaround late in the session to end higher after California sounded a note of optimism in its fight against the virus.

Hong Kong assets will be in focus after the economy contracted 8.9% in the first quarter from a year earlier, its worst quarter ever. West Texas oil extended gains. The dollar strengthened against most major peers.

BREAKING NEWS

Jumbo Group issues profit warning, expecting to report a significantly lower profit after tax year-on-year for H1 FY2020, owing to the impact of Covid-19 across its markets, it warned. In a filing to the Singapore Exchange, it said: “The pandemic had significantly impacted our China’s operations since January, before the Chinese New Year. In order to stop the spread of the Covid-19 virus, the Chinese government began imposing various measures to restrict the movement of people in January 2020. As a result, footfall in malls, and correspondingly, our outlets in China located in those malls, fell significantly.”

Keppel Corp has appointed Evercore Asia (Singapore) as independent financial adviser (IFA) on the partial offer by Temasek Holdings. In a filing to the Singapore Exchange on Monday night, Keppel said: “In view of the scale and diversity of the group’s businesses, the company has decided to appoint the IFA today, even though the pre-conditions have not been satisfied and/or waived by the offeror yet, so as to ensure the IFA would have sufficient time to carry out its review.”

The latest issue of Singapore Savings Bonds (SSB) opened on Monday with the lowest rates the fixed income instrument has ever offered since its launch in 2015. The June edition offers an interest rate of 0.57 per cent for the first year and an average rate of 1.05 per cent per annum over the 10-year holding period. This average rate that an SSB investor will get by staying invested for 10 years pales in comparison to the 1.3 per cent per annum offered by ICBC Singapore for one-year fixed deposits of at least S$500 – the same minimum amount required for SSB.

The four outlet malls under Sasseur Real Estate Investment Trust (Sasseur Reit) in China registered robust first-day sales as its annual SpringSales kicked off last month. The combined first-day sales for the four malls in Chongqing, Bishan, Hefei and Kunming were 47.2 million RMB (S$9.62 million) – up 411 per cent from the first-day reopening sales registered as they re-opened from March 11 following efforts to curb the Covid-19 pandemic.

Local developers’ sentiment has dived, with half of them likely to lower the selling prices of their new launches in the next six months. Real estate sentiment indices hit a record low in Q1 2020 amid the Covid-19 outbreak.

The current sentiment index went down to four in Q1 2020, from 4.4 in Q4 2019; the future sentiment index fell to 3.5 in Q1 2020, from 4.1 in Q4 2019. A score above five indicates improving market conditions, and a score below that, deteriorating conditions. The composite sentiment index, a derived indicator for the overall real estate market sentiments, stood at a historic low of 3.2. The last lowest score was recorded at 3.3 in Q4 2011.

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

TECHNICAL PULSE

Mapletree Logistics Trust

Recommended Action: Technical SELL

Bullish momentum came to an end on 21st February after the counter entered a 5-subwave corrective wave of ‘A’ after the rebound took place on 23rd March 2020.

>> Read more technical reports

RESEARCH REPORTS

CapitaLand Commercial Trust – Attractive valuations for a stable portfolio

Recommendation: ACCUMULATE (Upgraded), Last Done: S$1.54

Target Price: S$1.74, Analyst: Natalie Ong


– 1Q revenue was in line, DPU of 1.65cents came in lower, at 18.3% of FY20e DPU, due to retention of distributable income in prudent anticipation of cashflow disruptions from rental deferment

– Upgrade to ACCUMULATE, TP of $1.74 (prev $2.18). FY20e DPU was cut by 15% from 9.03cents to 7.67cents representing a yield of 5%. Cost of equity was increased from 6.34% to 7.25% – We raise our beta by 13bps to reflect higher market risk and lower our terminal growth assumption from 1.85% to 1.6% to factor in weaker leasing demand.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: (PSR) Singapore Exchange Ltd, Micro-Mechanics, Frasers Centrepoint Trust, Keppel DC REIT, SG Banking Note, SG REITs Sector Update, SG Bonds Strategy, Technicals & SG Phillip Weekly

Date: 27 April 2020

For more on Market Outlook

Phillip Research in 3 minutes: #21 – Singapore REITs Sector

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





Disclaimer
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

IMPORTANT INFORMATION

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