Daily Morning Note – 6 October 2021
Asian stocks look set to track a U.S. equity rebound as traders weigh the resilience of the economic recovery to elevated inflation fanned by surging energy costs. Treasury yields advanced and the dollar held a climb.
Futures rose Wednesday in Japan and Hong Kong, while Australia opened higher. U.S. contracts were steady after bargain-hunting for technology stocks that bore the brunt of a recent selloff boosted the S&P 500 and Nasdaq 100.
The 10-year Treasury yield spiked above 1.50%. The highest U.S. natural gas prices in 12 years highlighted inflation threats from energy prices, while service-sector activity was faster than expected, backing the case for a reduction in Federal Reserve bond-buying. Traders are awaiting labor market data later this week for more clues about the Fed policy outlook.
Singapore Press Holdings (SPH) has swung into the black, with a net profit of S$92.9 million for the financial year ended Aug 31, 2021 (FY21), amid a slight increase in total revenue from continuing operations, and fair value gains on investment properties. It reverses the net loss of S$83.7 million in the previous financial year, which had included S$232 million in fair value losses on investment properties. A final dividend of three Singapore cents per share was proposed. If approved, SPH would pay a total dividend of six cents per share in FY21, up from 2.5 cent in FY20.
United Hampshire US Real Estate Investment Trust (UHReit) has proposed to acquire two grocery-anchored freehold assets in Pennsylvania and Virginia, United States, for US$78.3 million. The acquisition is the Reit’s first after its initial public offering in March, 2020 and is also its first entry into Pennsylvania and Virginia, it said in a bourse filing on Tuesday. The purchase price comprises US$52 million for Penrose Plaza in Philadelphia, Pennsylvania and US$26.3 million for Colonial Square Shopping Center, Colonial Heights in Richmond, Virginia.
The Straits Trading Company’s real estate investment arm Straits Real Estate has agreed to subscribe into Savills IM UK Value Boxes Fund FCP-RAIF, a closed-ended common fund managed by an entity of Savills Investment Management (Savills IM). The fund is a reserved alternative investment fund established in Luxembourg. It focuses on acquiring convenience-led discount retail park assets in the UK. Savills IM has been appointed its investment adviser. Straits Real Estate’s subsidiary SRE Venture 18 will commit up to £60 million (S$110 million) as one of the investors in the fund.
Aoxin Q&M Dental Group is boosting its exposure in the Covid-19 testing space. The Catalist-listed company expects its acquisition of a stake in medical technology company Acumen Diagnostics to improve its top and bottom lines. The deal is a “very good opportunity” for the company to expand its reach into the medtech business, which has been on a tear since the start of the Covid-19 pandemic, Aoxin Q&M’s deputy chief executive Ryan San told The Business Times on Tuesday. Shareholders can expect stronger financials as soon as the second half of 2021 ending December, and higher dividend payouts, he added.
Nutryfarm International on Sept 30 reached agreements for the repayment of an outstanding deposit refund owed by the owner of First Linkage, as well as for the refund of equipment previously acquired from the company’s subsidiary. In a bourse filing late on Monday, the group said an outstanding HK$59.2 million (S$10.3 million) was due from First Linkage’s owner Wang Xiaoxin as at Jun 30, 2021, following the termination of Nutryfarm’s proposed acquisition of the tech company. Under the repayment agreement Mr Wang will pay 60 million yuan (S$12.6 million) to Nutryfarm’s indirect wholly owned subsidiary, LottVision Internet Management, as a full and final settlement for the outstanding deposit refund. Repayment of this sum will take place over three and a half years from Oct 1, 2021.
Facebook has apologized for the mass outage that left billions of users unable to access Facebook, Instagram, WhatsApp and Messenger for several hours. “To all the people and businesses around the world who depend on us, we are sorry for the inconvenience caused by today’s outage across our platforms,” said Santosh Janardhan, Facebook’s vice president of infrastructure, in a blogpost late Monday. The outage, which prevented users from refreshing their feeds or sending messages, was caused by “configuration changes on the backbone routers,” Janardhan said, without specifying exactly what the changes were.
A San Francisco federal court decided that Tesla must pay a former worker, Owen Diaz, around $137 million after he endured racist abuse working for the company, his attorneys told CNBC on Monday. The jury awarded more than attorneys asked for their client, including $130 million in punitive damages and $6.9 million for emotional distress. Bloomberg first reported on the decision. Diaz, a former contract worker who was hired at Elon Musk’s electric vehicle company through a staffing agency in 2015, faced a hostile work environment in which, he told the court, colleagues used epithets to denigrate him and other Black workers, told him to “go back to Africa” and left racist graffiti in the restrooms and a racist drawing in his workspace.
DeepMind, one of the world’s premier artificial intelligence labs, has turned a profit for the first time ever, according to a filing with the U.K. company registry published Tuesday. The London-based research firm recorded a profit of £43.8 million ($59.6 million) in 2020 after posting losses of hundreds of millions for the last several years. It reported a loss of $649 million in 2019, for example. Turnover at DeepMind more than tripled from just £265.5 million in 2019 to £826.2 million in 2020, according to the annual results filing on Companies House. DeepMind, which is owned by Google parent Alphabet, did not provide a specific reason for the revenue jump.
The effectiveness of Pfizer and BioNTech’s Covid-19 vaccine against infection tumbles over several months, falling from a peak of 88% a month after receiving the two-shot series to 47% six months later, according to an observational study published Monday in the peer-reviewed journal The Lancet. While the two-dose mRNA vaccine’s efficacy against infection wanes, its protection against Covid-related hospitalizations persists, remaining 90% effective for all coronavirus variants of concern — including delta — for at least six months, according to the study, which was funded by Pfizer.
PepsiCo Inc raised its full-year revenue forecast on Tuesday, as the easing of pandemic restrictions boosts demand for sodas at theatres and restaurants. Although the soft-drinks maker is grappling with supply-chain constraints that are making it more challenging to fully meet consumer demand, it said it was expecting fiscal 2021 organic revenue to rise about 8 per cent, compared with its prior forecast of a 6 per cent increase. The company also said core earnings per share will at least reach its US$6.20 target.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Technical Pulse: SATS Ltd
Recommended: Technical BUY; Analyst: Chua Wei Ren
SATS Ltd (US: S58) May’s rebound has not break and stays above the psychological resistance of $4.00 for 3 months. Yet the multiple testing has weakened the resistance zone of $4.20-$4.29 in the process with each shortfall displayed with higher lows. As such, technical has shown clear potential return of the bull
Buy spot: 4.22 Stop loss: 3.80 Take profit 1: 4.60 Take profit : 5.10
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