Daily Morning Note – 7 January 2022
Welcome to our Daily Morning Note from our Research team!
PHILLIP SUMMARY
Asian stocks looked set for gains Friday after their U.S. peers steadied as investors mulled the Federal Reserve’s latest signal it will move aggressively if inflation remains elevated. Treasuries extended a decline. Futures pointed higher in Japan and shares climbed in Australia following Thursday’s selloff. U.S. futures saw modest gains. The S&P 500 closed little changed after attempting to rebound from a near 2% drop Wednesday sparked by Fed meeting minutes that suggested the central bank is ready to raise rates sooner and higher than previously expected. Treasury yields continued to climb, although the velocity of their ascent eased with the 10-year rate near 1.73%. The dollar was slightly stronger, while oil climbed to a seven-week high on supply constraints. The yen held overnight gains and the yuan retreated. Gold fell and Bitcoin remained under pressure.
BREAKING NEWS
SG
Concrete and cement provider Pan-United Corporation has signed a cooperation agreement with Novaland Group for its subsidiary, FiCO Pan-United Concrete Joint Stock Company (FiCO PanU), to provide sustainable concrete solutions to the Vietnam property company for over 2 years.
The independent directors of the manager of First Reit (real estate investment trust) have recommended that unitholders vote in favour of the acquisition of 12 nursing homes in Japan from OUE Lippo Healthcare and a separate S$30.6 million settlement for cancelled works.
Property player SLB Development anticipates a “significant” year-on-year increase in net profit for H1 2022 ended November, the Catalist-listed company announced in a Thursday bourse filing. This is mainly due to substantial sales of units in its projects, with contributions recognised as construction progressed. However, its parent company Lian Beng Group still expects its overall performance for the half-year to be lower than for the previous year. Its performance is weighed down by continued challenges for the construction business amid the pandemic.
Pegasus Asia, a Special Purpose Acquisition Company by European asset manager Tikehau Capital and its partner Financiere Agache, lodged a preliminary prospectus with the Monetary Authority of Singapore on Thursday (Jan 6). It is the second player to lodge a prospectus for a SPAC listing on the Singapore Exchange, just hours after Vertex Technology Acquisition Corporation, the vehicle by Temasek-backed Vertex Venture Holdings.
KS Energy, a mainboard-listed company under judicial management, has entered an agreement to transfer its listing status to logistics company Jacobson Global Logistics (Singapore) via a scheme of arrangement. The consideration for the transfer is S$3 million, to be satisfied via the issuance of new shares in Jacobson Global, KS Energy’s judicial managers said in a Thursday bourse filing.
US
Sonos Inc. rose in post-market trading after it won a U.S. trade agency ruling that will limit the imports of some phones, laptops and speakers made overseas by Alphabet Inc.’s Google because they infringe patents for home audio technology.
Deere & Co. is being cautious in its rollout of self-driving tractors, a technology which the agriculture industry thinks could revolutionize farming. Chief Technology Officer Jahmy Hindman said the company is still “playing around” with the volume of autonomous tractors it will bring to the market this year, saying it could be anywhere between 10 to 50.
T-Mobile US Inc. exceeded Wall Street’s estimates for fourth-quarter growth, capping its biggest-ever annual gain, but predicted an industry slowdown in 2022 as carriers move away from the free phone promotions that have fueled a frenzy of sign-ups.
Micron Technology Inc said its output of some computer memory will be hit by the closing of the Chinese city of Xi’an aimed at limiting a fresh outbreak of the Covid-19 virus.
Personal-care giant Procter & Gamble Co. is the latest big U.S. brand to expand its presence in the metaverse in a bid to attract new customers. The maker of Tide detergent and Pampers diapers is offering attendees at CES a taste of its strategy, which includes a digital platform called BeautySPHERE that features virtual tours of the U.K.’s Kew Gardens.
GameStop Corp. is launching a division to develop a marketplace for nonfungible tokens and establish cryptocurrency partnerships, according to people familiar with its plans, pushing the company into much-hyped areas as it tries to turn around its core videogame business.
Hyundai Motor Company, the global mobility innovator, and Unity (NYSE: U), the world’s leading platform for creating and operating real-time 3D (RT3D) content, today announced at CES 2022 a partnership to jointly design and build a new metaverse roadmap and platform for Meta-Factory.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Phillip 2022 Singapore Strategy – The next two tapers
Analyst: Paul Chew
– STI recovered in 2021, rising 9.8% (2020: -11.8%). All the gains came from the banks. DBS alone accounted for around 60% of the rise in STI.
– We worry equities may struggle in 1H22. A stagflation head fake of slower economic growth and rising inflation will worry investors.
– We expect equities to recover in 2H22. Driving the rally will be the next two tapers, a decline in infections and a peak in inflation.
POEMS Podcast: Let the Money Talk
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Daily Morning Note – December 13, 2021
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