Daily Morning Note – 6 November 2020

PHILLIP SUMMARY

A global equity rally looked set to extend in Asia after investors as investors bought into technology and health-care firms. The S&P 500 rose almost 2% and the tech-heavy Nasdaq 100 surged closer to 3%. Futures in Japan and Hong Kong pointed to modest gains. Gold surged, while Treasuries were little changed. The yen strengthened past the closely watched 104 per dollar level.

Democratic nominee Joe Biden is inching closer to the 270 electoral votes he needs to win the presidency, while Donald Trump’s legal team continues to fight the ballot counting process. Biden needs a win in one more state — Pennsylvania, Georgia, Nevada or North Carolina — provided that other race calls stand. But Trump has expanded his list of lawsuits to include Nevada, adding to challenges in Michigan, Georgia and Pennsylvania.

BREAKING NEWS

Singapore retail sales fell 10.8 per cent year on year in September, reversing the previous two months’ trend of lessening declines, according to the Singapore Department of Statistics (Singstat) on Thursday. The total retail sales value in September was S$3.2 billion, with online sales accounting for 11.2 per cent. Excluding motor vehicles, September retail sales were down 12.7 per cent, due mainly to the computer and telecommunications equipment industry, which saw lower sales of mobile phones compared to the high base a year ago, when there were new phone launches, said Singstat. On a seasonally-adjusted month-on-month basis, retail sales were down 4.5 per cent, or 4.2 per cent excluding motor vehicles.

Property developer and investment company Hongkong Land‘s full-year underlying performance is expected to be moderately affected by a reduced contribution from its investment properties portfolio, the mainboard-listed company said in an interim management statement on Thursday. This is due to the provision of temporary retail rent relief and a delay in the timing of profit recognition in respect of development properties in mainland China caused by pandemic-related construction delays, Hongkong Land said. The group is also expecting further losses on the revaluation of investment properties in the second half of the year due to adverse market conditions.

Prime US Reit reported a net property income of US$24.2 million in the third quarter, exceeding IPO projections by 9.8 per cent, according to an exchange filing on Thursday evening.Its gross revenue also outperformed IPO forecasts by 9.1 per cent at US$36.7 million, while distributable income stood at US$18 million, outdoing projections by 15.4 per cent.This was attributed to strong rental collections at 99 per cent with minimal deferrals and robust leasing activity of 83,168 square feet in Q3 with 8.9 per cent positive rental reversion, the real estate investment trust (Reit) manager said.

Glove manufacturer UG Healthcare Corporation on Thursday reported net profit of S$22.7 million for the first fiscal quarter ended September, a 74-fold increase from net profit of S$305,000 in the corresponding quarter last year. The group’s latest quarterly profit had also exceeded its FY2020 net profit of S$13.4 million, said the group in a bourse filing. UG Healthcare’s revenue for the quarter rose 170.6 per cent to S$71.2 million from S$26.3 million in the year-ago period, due to a higher volume of gloves sold as well as higher average selling prices on the back of stronger demand for disposable gloves and supply constraints.

Yangzijiang Shipbuilding (YZJ) announced Thursday that it has entered into an agreement with a Japanese shipowner for the building and delivery of 10 3,500 twenty-foot equivalent unit (TEU) container ships.Of the 10 vessels, five are firm orders, worth approximately US$198 million in total, the China-based shipbuilding group said in an exchange filing during the mid-day break. The other five are option orders for identical vessels. Should all the options be exercised, this batch of orders will be worth US$396 million in total. YZJ said it has secured new orders for 34 vessels, worth about US$1.03 billion in the year to date.

China’s Alibaba Group beat estimates for quarterly revenue on Thursday, as its core e-commerce business continued to grow following China’s emergence from the coronavirus lockdown. The company’s US-listed shares, which have gained about 39 per cent this year, fell nearly 2 per cent in trading before the bell. Sales from Alibaba’s core e-commerce business rose 29 per cent to 130.92 billion yuan (S$26.7 billion) in the reported quarter. Net income slumped 63 per cent to 26.52 billion yuan, as the company had booked a one-time gain last year from its 33 per cent equity interest in Ant Group.

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

TECHNICAL REPORTS

Wilmar International Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Wilmar International (SGX: F34) failure to close above $5.00 has caused a strong sell-off and it has persisted for over 2 months. Despite further gloomy outlook, the rebound may have arrived based on the technical indicated

>> Read more Technical reports

RESEARCH VIDEOS

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

Date: 02 November 2020

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