Daily Morning Note – 6 April 2021
PHILLIP SUMMARY
Asian stocks look set to climb Tuesday after U.S. equities rallied to a record on solid economic data that added to evidence of a strengthening recovery. The dollar and Treasury yields fell. Crude oil sank.
Futures pointed higher in Japan, while Australian and Chinese markets will reopen after holidays. Hong Kong remains closed. Most major groups in the S&P 500 Index advanced, lifting the benchmark to an all-time high. Alphabet Inc. and Tesla Inc. helped the Nasdaq 100 jump 2%.
Oil plunged as growing delays in Europe’s reopening and looming Iranian supply dampened hopes for a swift decline in global inventories.
BREAKING NEWS
SG
A wholly-owned subsidiary of real estate agency PropNex is set to acquire a 70-per-cent stake in online marketplace Ovvy for S$1 million, the mainboard-listed company said in an exchange filing on Monday. The acquisition by PropNex Grandeur Homes expands the group’s footprint in proptech, paving the way for it to offer more value-added real-estate services through an additional technology platform, PropNex said.
Property group KSH Holdings has clinched a S$171.8 million contract for Biopolis Phase 6 in one north as well as the adjacent Buona Vista node of the rail corridor, the mainboard-listed company said in an exchange filing on Monday. It secured the contract from HB Universal, a wholly-owned subsidiary of mainboard-listed property developer Ho Bee Land. Under the design and build contract, KSH will construct a biomedical sciences development consisting of a 12-storey tower block with two basement carparks and rail corridor works at North Buona Vista Drive in Queenstown Planning Area.
A subsidiary of The Straits Trading Company is set to acquire JL Family Office’s (JLFO) 10 per cent stake in Straits Real Estate (SRE) for S$105 million in cash, the mainboard-listed investment company said in an exchange filing on Monday. The share sale and purchase agreement is between STC Capital, Straits Trading’s wholly-owned subsidiary, and JL Equity II, a unit of the JLFO. The acquisition comes as JLFO seeks to divest its stake in SRE at the end of its successful investment cycle, Straits Trading said in a statement.
AEM Singapore, which has made an offer for all the shares of CEI it does not already own, will vote against the payment of dividends at CEI’s annual general meeting (AGM) on April 19. As AEM already has control of 81.7 per cent of CEI, this means the proposed payments of a third and final dividend of 0.4 Singapore cents per share and a special dividend of 2.6 cents per share will not take place. In a statement, AEM said it believes it would be in the best interest of CEI that the cash be retained to fund expansion and optimise operational needs.
The Trendlines Group announced on Monday its proposal to seek a dual primary listing on Israel’s Tel-Aviv Stock Exchange (TASE). The medical and agrifood technology investment company also said it plans to raise more capital with a public offering of new securities in conjunction with the listing. Trendlines expects at least 70 per cent of these securities to be subscribed by institutional investors. According to the company, institutional investor interest is growing in technological companies listed on TASE.
Aspen Glove, a subsidiary of Singapore-listed Aspen (Group) Holdings has received a 100 per cent investment tax allowance (ITA) grant from Malaysia’s finance ministry. This grants it an income tax exemption for designing, developing and manufacturing examination and surgical nitrile gloves. The ITA grant entitles Aspen Glove to an allowance of 100 per cent of its capital expenditure – excluding land cost – for 10 years. Aspen Glove will be allowed to offset the allowance against 100 per cent of its statutory income for each year of assessment, it said in a statement. Unutilised allowance can be carried forward to subsequent years until fully utilised.
Investment firm Sun Venture has obtained an 85.5 million-pound (S$159.2 million) green loan from OCBC through the bank’s London branch, the two entities said in a joint release on Monday. The loan will be used for the refinancing of 1 New Oxford Street, an office and retail development that Sun Venture owns in central London. The building has been certified “Excellent” under the Building Research Establishment Environmental Assessment Method (BREEAM), a recognition given to the top 10 per cent of new and non-domestic buildings in the United Kingdom meeting BREEAM’s sustainability criteria.
US
Tesla’s estimate-smashing deliveries of electric vehicles in the first quarter suggest boss Elon Musk’s bet on growth in China and Europe is starting to pay off. The results marked a strong start to a year in which Mr Musk, the company’s chief executive officer, is counting on global operations to help scale-up production and sales. Palo Alto, California-based Tesla delivered 184,800 cars worldwide in the year’s first three months, trouncing the 169,850 average estimate in a Bloomberg survey of analysts and beating the fourth-quarter figure by about 4,000 vehicles.
GameStop dropped 13% in Monday’s premarket after announcing plans to sell up to 3.5 million shares as the video game retailer looks to take advantage of its stock surge following a Reddit-driven trading frenzy earlier this year. GameStop said it would use the proceeds to speed up the shift in its business model to e-commerce. GameStop closed Thursday at $191 per share. It traded as high as $483 in late January. Before the Reddit trade took hold, the stock began the year under $20.
The Supreme Court on Monday sided with Google against Oracle in a long-running copyright dispute over the software used in Android, the mobile operating system. The court’s decision was 6-2. Justice Amy Coney Barrett did not participate in the case. The case concerned about 12,000 lines of code that Google used to build Android that were copied from the Java application programming interface developed by Sun Microsystems, which Oracle acquired in 2010.
The U.S. 10-year Treasury yield moved slightly higher early Monday as traders continued to digest March’s bumper jobs report. The yield on the benchmark 10-year Treasury note ticked up to 1.731% in morning trade. The yield on the 30-year Treasury bond also rose to 2.382%. Yields move inversely to prices. It comes after nonfarm payrolls for last month rose by 916,000. This was more than analysts expected and marked the fastest growth since August 2020. The unemployment rate declined to 6%.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
TECHNICAL REPORTS
Ascott Residence Trust
Analyst: Chua Wei Ren
Recommended Action: Technical BUY
Ascott Residence Trust (SGX: HMN) technical shows that the trust is heading for an impending upside break soon
Buy stop: 1.09 Stop loss: 1.00 Take profit 1: 1.24 Take profit 2: 1.30
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