Daily Morning Note – 6 September 2018


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Tech stocks slide lower across the board on Wednesday as executives from Facebook (-2.33%) and Twitter (-6.06%) defended before Congress their efforts to prevent election meddling. The selloff did not just affect social media giants but also chip makers, online streaming services, software developer and videogame makers. In total, 59 of the 73 companies in the S&P 500 technology sector posted losses on the day, an alarming retreat for the best-performing group in the broad index this year. The tech-heavy Nasdaq Composite fell -1.2% and recorded its biggest decline in three weeks, while the broader S&P 500 dropped just -0.3% and the Dow Jones Industrial Average gained 0.1%.
Elsewhere in the emerging markets, among the worst-hit stock market were in Saudi Arabia and Indonesia, where the benchmark index tumbled most in two years. The Jakarta composite index fell -4.7% on Wednesday, the worst day in five years.


Straits Times Index – Daily timeframe – Bearish

– The STI fell 1.68% on 05/09/18 leading to the STI breaking below the 3200 – 3189
support area.

– Thus with the current bearish break, expect the bearish momentum to sustain for
price to test the next support area at 3114 followed by 3030.

For more information and additional disclosures, refer to the link here.


The Nasdaq Composite saw its worst day since Aug. 15 as it fell by 1.2 percent to 7,995.17. The S&P 500 also slid by 0.3 percent to 2,888.60. The sell-off in the Nasdaq and S&P 500 was led by a fall in tech stocks, as Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg both testified in front of Congress, addressing issues surrounding online election meddling and abuse on social platforms.

The United States and Canada have made progress in talks to revise the North American Free Trade Agreement, and officials from the two sides will work together into Wednesday and Thursday night for further discussion.

Indonesian shares were set to suffer their worst day in five years as the benchmark Jakarta Composite index slumped 4.7% by midafternoon on Wednesday, to 5628, on track for its worst day since August 2013, while most other Asian markets also declined. On the same note, Bank Indonesia Governor Perry Warjiyo has said the rupiah is away from its fundamental value, and called on corporations in the country to not stockpile dollars because it would negatively affect the market.

Singapore and Malaysia have agreed to suspend construction of the Kuala Lumpur-Singapore High Speed Rail project until May 31, 2020, with service on the advanced train line expected to begin by the start of 2031

Tesla’s stock and bond prices dropped on Wednesday after Chief Executive Elon Musk renewed an attack on a British caver whom he had previously insulted on social media and a day after Mercedes unveiled a challenge to the electric car maker.

According to people familiar with the matter, pricing practices within American Express Co’s foreign-exchange unit is being probed by the Federal Bureau of Investigation, which is focused on whether the foreign-exchange international payments department misrepresented pricing to clients in order to win their business.

Newly-launched cybersecurity firm Ensign InfoSecurity – a JV between Temasek and StarHub – will invest majorly in talent and research and development. For one, Ensign will buy “certain cybersecurity business-related assets” of StarHub’s for a S$120 million consideration.

United Overseas Bank has signed a MOU with Shanghai Pudong Development Bank to serve companies hoping to tap opportunities from the Belt and Road Initiative.

Telstra has revised its FY19 guidance based on the nbn co Corporate Plan 2019 released on 31 August 2018, as its nbn Corporate Plan 2019 included lower than previously estimated premises declared Ready for Service (RFS) and premises activated for FY19, which will be partly offset in FY19 by the natural hedge.

Joint venture partners Tawana Resources NL and Alliance Mineral Assets Limited have announced updates on its Bald Hill Lithium and Tantalum Mine project. Both parties are targeting production of 60,000 to 75,000 tonnes of lithium concentrate between July and December 2018.

Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research

Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research

Read the research report(s), available through the link(s) above, for complete information including important disclosures

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