Daily Morning Note – 5 November 2020

PHILLIP SUMMARY

Joe Biden looks to be on the brink of winning the White House, but President Donald Trump is far from giving up. The Democrat is one state shy of the needed electoral votes after taking Wisconsin and Michigan, and said he is confident he will win once the remaining votes are counted. Meanwhile Trump opened a legal fight to stop the tallies in at least two states and claimed without evidence that he’s being cheated from victory. Biden is leading in Nevada, while his campaign believes absentee votes in Georgia will push him over the top.

Asian stocks looked set for gains after U.S. equities and bonds climbed, as investors showed confidence that the tightly contested election outcome would ensure key elements of the bull market remain intact. The S&P 500 rose more than 2% and the Nasdaq 100 surged more than 4% in its best rally since April. Equity futures rose in Japan and Hong Kong, and the offshore yuan advanced. The failure by the Democrats to clearly sweep Congress and the White House pares back bets that traders had made on a massive fiscal stimulus package. The dollar weakened against many of its major peers, while gold slipped.

BREAKING NEWS

DBS Group reported net profit of SGD 1.30 billion for third-quarter 2020, up 4% from the previous quarter. Business momentum improved as fee income rebounded 17% to pre-Covid levels, softening the impact of lower interest rates as well as a decline in trading income from a high base. Total income fell 4% to SGD 3.58 billion while profit before allowances was 9% lower at SGD 2.04 billion. Nine-month total allowances quadruple on year to SGD 2.49 billion, including general allowances of SGD 1.50 billion.

Oversea-Chinese Banking Corporation Limited (“OCBC Bank”) reported its financial results for the third quarter of 2020 (“3Q20”). Group net profit for 3Q20 of S$1.03 billion was 41% higher as compared to S$730 million in the previous quarter (“2Q20”), largely driven by a fall in allowances. The Group’s operating profit before allowances was S$1.59 billion, down 5% QoQ, as lower net interest income and trading income more than offset increases in fee-based income. Net interest income was 4% lower at S$1.42 billion, as a result of lower market rates which drove a 6 basis points contraction in net interest margin (“NIM”).

Yangzijiang Shipbuilding has reported earnings of RMB585.2 million for 3QFY20, down 17% y-o-y, as its bottom line was hit by forex losses and impairment. Revenue in the same period was RMB3.58 billion, down 34% y-o-y, due to lower trading volume. During the quarter, the company booked forex losses of RMB291 million and made an impairment of RMB190 million too. The company has been winning new ship building orders. Year to date, it has secured contracts totalling US$834 million to build 29 vessels. Its total order book now stands at around US$2.4 billion for 67 vessels, to be delivered over the next year or so.

Property giant City Developments Ltd (CDL) on Wednesday said it has appointed Deloitte & Touche Financial Advisory Services as its external financial adviser to assist in further evaluating and reviewing its investment in China-based Sincere Property Group. This comes after CDL director Kwek Leng Peck resigned last month, citing disagreements with the board and management on the group’s investment in Sincere, as well as its management of London-based unit, Millennium & Copthorne Hotels.

Mainboard-listed AEM Holdings has raised its FY2020 revenue guidance to between S$500 million and S$520 million based on sales order visibility and business outlook. This comes as the group announced a near doubling of revenue year on year for the fiscal third quarter ended Sept 30. AEM, which provides advanced chip-testing solutions, previously announced on Sept 10 an upward revision to its revenue guidance to be between S$480 million and S$500 million for FY 2020.

Parkway Life Real Estate Investment Trust’s (Parkway Life Reit) distribution per unit (DPU) rose 7.4 per cent to 3.54 Singapore cents for its third quarter ended Sept 30, 2020, from 3.3 cents a year ago. Gross revenue was up 0.8 per cent to S$30.2 million for the quarter, from S$29.9 million the year before. This was largely due to contributions from three Japan nursing rehabilitation facilities acquired in Q4 2019, higher rent from Singapore properties as well as the appreciation of yen, the Reit manager said on Wednesday.

Final phase of the reopening will not be a return to pre-Covid status quo, but to a new normal. Phase Three of Singapore’s reopening could last for more than a year, said Health Minister Gan Kim Yong in Parliament on Wednesday, replying to a question from Tampines Member of Parliament Cheng Li Hui.

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

RESEARCH REPORTS

U.S. Elections Results Update – All eyes on Nevada for a Biden win

Analyst: Yeap Jun Rong

– Current preliminary results point to a tight race with Biden potentially securing exactly 270 electoral votes needed to be elected as president.

– Having won Wisconsin and Michigan, he will just need to maintain his lead in Nevada to have a marginal victory. In the event whereby he lost Nevada, he will have to turn to Pennsylvania as his next best alternative.

– For the Senate, the Democrats’ possible path to victory is to retain Michigan and flip Alaska, while aiming to flip Georgia special election later in January. The scenario is possible but unlikely.

– We believe that the most likely scenario from the U.S. election will be a potential Biden presidency with split Congress. We summarised the potential impact of his policies across key areas and sectors/industries below.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here

RESEARCH VIDEOS

Webinar Of The Week

Market Outlook: (PSR) US Election (Swing States & Sector Overview), REIT Updates, Sheng Siong & more

Date: 02 November 2020

For more on Market Outlook

Updates summarised in 3 minutes

Phillip Research in 3 minutes: #26 – iX Biopharma Ltd; 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





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