Daily Morning Note – 7 Nov 2019
WEEKLY MARKET OUTLOOK WEBINAR
Asian stocks are poised to open mixed Thursday following reports of a potential delay to the signing of a partial U.S.-China trade deal. Treasuries rebounded after dropping for three days, while futures were lower on Japanese and Hong Kong equities and higher on Australian stocks. The S&P 500 Index closed little changed Wednesday. Shares in energy companies declined alongside West Texas crude, which slumped after a report that the biggest producers in OPEC+ aren’t pushing for deeper oil-supply cuts when the group meets next month. The yen rose, as did gold.
Wall Street stocks were under pressure on Wednesday as investors awaited concrete progress on US-China trade talks while petroleum-linked shares fell with oil prices.
CATALIST-LISTED oil and gas solutions provider SBI Offshore has lost its bid for more time to get shareholders’ approval over a planned reverse takeover, it disclosed on Wednesday.
CATALIST-LISTED metal dealer Metech International, which is making a shift into supply chain management, returned to the black in the first quarter, according to results released on Wednesday.
CATALIST-LISTED building solutions provider Libra Group, which suspended trading in August when it could no longer continue as a going concern, disclosed on Wednesday that United Overseas Bank (UOB) has appointed receivers for the company’s mortgaged property in Loyang Drive.
HEALTHCARE real estate investment trust First Reit will pay out a distribution per unit (DPU) of 2.15 Singapore cents for the third quarter, unchanged from the same period the year before, manager Bowsprit Capital Corp said in results released on Wednesday.
MAINBOARD-LISTED precision manufacturer Sunningdale Tech‘s earnings slid in the third quarter, as a fall in revenue was exacerbated by retrenchment costs, rents and other expenses, according to results released on Wednesday.
MAINBOARD-LISTED vessel chartering company CH Offshore fell further into the red in the third quarter, on the back of a provision for brokers’ commission that drove up administrative expenses, according to results released on Wednesday.
MAINBOARD-LISTED equipment service provider Frencken Group saw net profit surge in the third quarter on the absence of the previous year’s one-off costs, as per results out on Wednesday.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
Oversea-Chinese Banking Corp Ltd– Catch-up in NIM expansion
Recommendation: ACCUMULATE (Maintained), Last Close Price: S$11.1
Target Price: S$11.7, Analyst: Tin Min Ying
– 3Q19 revenue/PATMI were within our expectations. However, if not for the lower tax rate of 10% for this quarter, earnings would have fallen short of our expectations.
– NII supported by 5bps YoY NIM expansion to 1.77% and 2% YoY loans growth.
– Fees income rose 10% YoY to S$550mn, OCBC’s highest on record.
– Insurance income fell 9% YoY due to fair value movements as a result of lower interest rates used to value insurance contract liabilities.
– Allowances ballooned six times to S$323mn mainly due to ECL refinement for OCBC NISP, provisioning for two corporate accounts and ECL adjustment to account for MEV in the ECL model
– NPL ratio rose to 1.6% mainly due to two corporate accounts (3Q18: 1.4%).
– We maintain ACCUMULATE at a lower target price of S$11.70 (previously S$12.50). We roll forward our Gordon growth model to FY20 to arrive at our new TP of S$11.70.
StarHub Limited – Recovery underway
Recommendation: ACCUMULATE (Maintained), Last Done: S$1.48
Target Price: S$1.58, Analyst: Alvin Chia
– Revenue and NPAT met expectations. Excluding S$9mn one-off tunnel income from TPG, NPAT would have missed our estimates by 3%.
– Mobile segment relatively resilient considering competition and substantial churn from single enterprise customer.
– Enterprise revenue grew 16% YoY boosted by cyber-security which spiked 135% YoY.
– Expect pay-tv business to stabilise in FY20e due to steadier subscriber base.
– Maintained ACCUMULATE with an unchanged TP S$1.58. No changes to our estimates.
Webinar Of The Week
Market Outlook: : (PSR) Hyphens Pharma, Uunited Overseas Bank Limited (UOB), CapitaLand Mall Trust, Frasers Centrepoint Trust, Sheing Siong Group, Phillip SG Weekly, US Weekly, US Banking & Technical Analysis
Date: 04 November 2019
Phillip Research in 3 minutes: #16- JEP Holdings Ltd
|The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.|
|This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.|