Daily Morning Note – 7 July 2021

PHILLIP SUMMARY

Asian stocks look set to fall Wednesday after U.S. shares snapped a winning streak and Treasury yields retreated on concerns about the economic outlook and risks from Covid-19 variants. The dollar firmed.

Futures dropped in Japan, Australia and Hong Kong. U.S. contracts edged down after the S&P 500 dipped from a record, led by the energy and financial sectors. Amazon.com Inc. helped take the Nasdaq 100 to a fresh peak. Ten-year U.S. Treasury yields hit February lows amid slower-than-expected service-sector expansion. Australian and New Zealand sovereign bonds rallied.


BREAKING NEWS

SG News

Rex International has entered into a subscription agreement to invest up to US$4 million in commercial drone company Xer Technologies, the group said on Tuesday. The investment comprises US$1 million for a 40 per cent interest in Singapore-incorporated Xer Technologies, and a commitment to inject up to US$3 million in the company, subject to the achievement of certain technical and sales milestones within the next 18 months.

ST Telemedia Global Data Centres (STT GDC) on Tuesday announced that it has officially launched its hyperscale data centre with an IT load capacity of up to 40 megawatts (MW) at Loyang Close. The six-storey facility, STT Loyang, is STT GDC’s largest facility in Singapore to date, and has a gross floor area of more than 27,000 square metres (sq m), as well as a net lettable area of over 10,700 sq m.

Dasin Retail Trust’s trustee-manager announced on Monday that its chairman Zhang Zhencheng, as well as Aqua Wealth Holdings, has terminated a proposed sale and purchase agreement with two subsidiaries of ARA Asset Management made in April this year. Mr Zhang is also a controlling shareholder of the trustee-manager, while Aqua Wealth is a controlling unitholder of the trust. As part of the earlier proposed agreement, two subsidiaries of ARA Asset Management were to buy a half-stake in the trustee-manager and some 5 per cent of total units issued in the trust.


US News

Long-term Treasury yields fell on Tuesday amid signs that the economic recovery from the pandemic could be slowing. While economic growth boomed in the first half of 2021 and is set to keep expanding rapidly the rest of the year, investors digested signals that much of the comeback has already occurred. The latest numbers showed growth in the service sector of the economy slowed by more than expected in June from a record level the prior month. This follows a tick-up in the unemployment rate on Friday.

Major U.S. airlines relaxed ticket change policies for several Florida cities as Tropical Storm Elsa approached the state. Heavy rains and high winds are likely in western Florida through Wednesday, the National Oceanic and Atmospheric Administration said Tuesday. The storm currently has maximum sustained winds of about 60 mph, the NOAA said. Tampa International Airport said it would suspend passenger flights from 5 p.m. EDT on Tuesday and plans to reopen at 10 a.m. on Wednesday.

The Department of Defense announced Tuesday it’s calling off the $10 billion cloud contract that was the subject of a legal battle involving Amazon and Microsoft. The JEDI, or Joint Enterprise Defense Infrastructure, deal has become one of the most tangled contracts for the Department of Defense. In a press release Tuesday, the Pentagon said that “due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs.”


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

TECHNICAL PULSE

Capitaland Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Capitaland Ltd (SGX: C31) strong upside is set to continue based on the recent technical and price actions.

Buy spot: 3.77 Stop loss: 3.53 Take profit 1: 4.10 Take profit 2: 4.38

Fortress Minerals Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Fortress Minerals Ltd (SGX: OAJ) strong upside is set to continue after a 2 months period of consolidation from 11th May to 28th June 2021 based on the recent technical and price actions.

Buy spot: 0.705 Stop loss: 0.515 Take profit 1: 0.900 Take profit 2: 1.025

>> Read more technical reports

HK Reports – Read up on our Hong Kong reports here

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Market Outlook: CapitaLand, Oxley Holdings, SPH, SG REITs Monthly, SG Weekly

Date: 5 July 2021

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





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IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

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