DAILY MORNING NOTE | 7 July 2023

Phillip Summary

Singapore shares fell 1.1 per cent or 34.95 points to 3,150.43 on Thursday (Jul 6) as investor sentiment weakened amid geopolitical concerns and interest rate expectations. Across the broader market, losers beat gainers 338 to 196, after 1.2 billion securities worth S$1.1 billion were traded. Major Asian bourses were also in the red. Japan’s Nikkei 225 fell 1.7 per cent, Hong Kong’s Hang Seng Index tumbled 3 per cent, while South Korea’s Kospi lost 0.9 per cent.

WALL Street stocks dropped on Thursday (Jul 6) following strong US economic data that boosts the chances for more Federal Reserve interest rate hikes.Thursday’s reports included releases from payroll firm ADP estimating the US economy added 497,000 jobs last month, more than double the expected amount. Also, a survey by the Institute for Supply Management pointed to solid growth in the services sector in June, again suggestive of a growing economy. The Dow Jones Industrial Average finished at 33,922.26, down 1.1 per cent. The broad-based S&P 500 dropped 0.8 per cent to 4,411.59, while the tech-rich Nasdaq Composite Index also declined 0.8 per cent to 13,679.04.

Top gainers & losers

Factsheets


EVENTS OF THE WEEK

Factsheets


Breaking News

SG

SINGAPORE’S latest six-month Treasury bills, also known as T-bills, offered a cut-off yield of 3.99 per cent – up from last month’s 3.89 per cent. The Monetary Authority of Singapore’s (MAS) data, published on Thursday (Jul 6), showed that a total of S$5.4 billion was allotted out of the S$10.3 billion received in applications. The bid-to-cover ratio was 1.91.

SINGLE family offices (SFOs) that have applied for and have been awarded tax incentives in Singapore employ about 1,400 Singaporeans and permanent residents (PRs), about two-thirds of whom are paid more than S$5,000 per month, Senior Minister Tharman Shanmugaratnam said on Thursday (Jul 6). In a written parliamentary reply, he said the Monetary Authority of Singapore (MAS) does not have data on all SFOs in Singapore, since they do not need to be licensed by the authority. This is because they do not manage third-party assets.

The sponsor of Sabana Industrial Real Estate Investment Trust (Sabana Reit) on Thursday (Jul 6) shot back at an open letter from activist investor Quarz Capital, which had sought support from the authorities to ensure fair conduct of an upcoming extraordinary general meeting (EGM).In response, ESR Group said Quarz’s push for a vote on internalisation without first securing the in-principle consent of lenders to continue with current financing arrangements, or ensuring that standby facilities are in place, is “irresponsible and reckless”.


US

The US services sector grew faster than expected in June as new orders picked up, but a measure of prices paid by businesses for inputs fell to more than a three-year low, suggesting that the closely watched services inflation would continue to cool. The Institute for Supply Management (ISM) said on Thursday that its non-manufacturing PMI increased to 53.9 last month from 50.3 in May. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy. Economists polled by Reuters had forecast the non-manufacturing PMI rising to 51.0.

The US dollar turned lower on Thursday (Jul 6) as investors looked ahead to pivotal US labour market data following minutes from the Federal Reserve’s June meeting, while a broad risk-off mood lent support to the Japanese yen.

FORD Motor on Thursday (Jul 6) followed rivals in reporting a rise in second-quarter US auto sales, driven by easing supply chain snags and pent-up demand for personal transportation.The US automaker’s quarterly sales rose about 10 per cent to 531,662 vehicles, the company said.

ULTRA low-cost e-commerce platform Temu, owned by PDD Holdings, has started selling to Japan, marking its first foray into the Asian market.The marketplace, the sister site of Chinese discount e-commerce platform Pinduoduo, ships everything from clothing to electronics and home goods, mainly from Chinese merchants to customers overseas at rock bottom prices.A drop-down menu on Temu’s website confirms Japan is one of the countries it now ships to.

US auto safety regulators said on Thursday (Jul 6) they are seeking updated responses and current data for an ongoing probe into 830,000 Tesla vehicles and the automaker’s advanced driver assistance system Autopilot. The National Highway Traffic Safety Administration (NHTSA) sent Tesla a letter on Jul 3 seeking updates to questions it had asked in August 2022 and is now demanding answers by Jul 19, according to a copy of the letter made public by the agency. Tesla did not respond to a request for comment.


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


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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.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com