Daily Morning Note – 8 April 2021
Asian stocks are poised for a mixed open Thursday after U.S. equities drifted higher, with investors mulling the latest insights into the Federal Reserve’s relaxed stance on inflation risks.
Futures dipped in Japan and Hong Kong and climbed in Australia. U.S. futures ticked up after modest gains took the S&P 500 to another record close, despite dwindling volume on U.S. exchanges. Rallies in technology giants including Apple Inc. helped push the Nasdaq 100 higher. The dollar rose and Treasury yields edged higher.
A subsidiary of property developer Chip Eng Seng Corporation is set to sell two conservation shophouses along Tanjong Pagar Road and three units of shophouses along Geylang Road, the company said in an exchange filing on Tuesday. CES Capital Holdings entered into a sale and purchase agreement to sell its properties at 84/A/B and 86/A/B Tanjong Pagar Road occupying an aggregate land area of about 1,653 square feet (sq ft), the company said. The purchase price is nearly S$10.7 million.
The Singapore Exchange (SGX) has launched its consultation on special purpose acquisition companies (SPACs), and it shows that the bourse has paid close attention to the criticisms of the structure. With proposed rules such as minimum market capitalisation, limiting redemptions to dissenting shareholders, as well as minimum sponsor equity participation and shareholding moratorium, the bourse has set the tone on what it expects. Investors should cheer the better alignment of interests, even if the proposed structure raises the stakes for any sponsor planning on listing SPACs in Singapore.
Mun Siong Engineering has been fined S$15,000 by the Ministry of Manpower (MOM) and barred from applying for new work passes until Dec 29, the mainboard-listed company said in an exchange filing late on Tuesday. This comes as the company was found by MOM to have breached the Employment of Foreign Manpower Act. Mun Siong said one of its former employees made an “inherent oversight” in its submission to MOM for the transfer of six workers from their original employer. “The said former employee relied on verbal representations, instead of seeking documentary proof, from each of the six said work pass workers,” said Mun Siong.
Two iron ore plays on the Singapore Exchange, both Malaysian-based, have been quite the rage as steel mills make good money and inventories shrink on higher demand. As prices of the sought-after reddish metal trended higher, so have the shares of those that mine and sell it. Catalist-listed Fortress Minerals, for instance, enjoyed record sales volume in the nine months to November last year (the company has a February year-end). Its net profit for Q3 FY2021 was nearly double that for FY2020, and the counter has gained 25 per cent this year to close at 37.5 Singapore cents on April 6. The shares of its sector peer Southern Alliance Mining (SAM), which has a mine in Johor, Malaysia and is also listed on Catalist, have surged 61.1 per cent to 58 Singapore cents over the same period.
In preparation for its debut on the Nasdaq next week, cryptocurrency exchange Coinbase said on Tuesday that first-quarter revenue climbed about nine-fold from last year, driven by a historic rally in the price of bitcoin. Revenue in the period jumped to about $1.8 billion from $190.6 million in the same quarter a year earlier, Coinbase said in a press release, adding that the results are preliminary and unaudited. Net income grew to between $730 million and $800 million from $31.9 million a year ago. Coinbase said it has 56 million verified users.
Facebook said Tuesday that hackers “scraped” personal data of some half-billion users back in 2019 by taking advantage of a feature designed to help people easily find friends using contact lists. A trove of information about more than 530 million Facebook users was shared over the weekend at a hacker forum, prompting the leading social network to explain what happened and call on people to be vigilant about privacy settings. “It is important to understand that malicious actors obtained this data not through hacking our systems but by scraping it from our platform prior to September 2019,” Facebook product management director Mike Clark said in a post.
Chinese travel booking site Trip.com has filed for a secondary listing in Hong Kong, following other high profile names like Alibaba and Baidu, to raise money in the financial hub. Trip.com, which is currently listed on the Nasdaq in the U.S., did not disclose the number of shares it will issue nor the price they will list for. That is usually determined some time after the initial filing in Hong Kong. JPMorgan, CICC and Goldman Sachs will be the joint sponsors of the secondary listing.
Shares of satellite-to-smartphone broadband company AST SpaceMobile began trading on the Nasdaq on Wednesday, with the company the first among a flurry of recent space companies to close its SPAC deal. AST SpaceMobile trades under the ticker ASTS, with shares previously listed under the SPAC New Providence before the merger.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
Analyst: Chua Wei Ren
Recommended Action: Technical BUY
HRnetgroup Ltd (SGX: CHZ) technical shows that the upside is set to continue to rally once more
Buy spot: 0.670 Stop loss: 0.645 Take profit 1: 0.710 Take profit 2: 0.760
iX Biopharma Ltd – Fanning out in China
Recommendation: BUY (Maintained); TP: S$0.445
Last Done: S$0.255; Analyst: Tay Wee Kuang
– Entered strategic cooperation agreement with China Resources Pharmaceutical Commercial Group Co., Ltd (CRPCG).
– CRPCG is a subsidiary of China Resources Pharmaceutical Group (3320 HK, Not Rated), the second largest pharmaceutical manufacturer and one of the three largest drug distributors by revenue in China.
– Company will be able to piggyback on CRPCG’s network for the commercialisation of its products in China.
– No change to forecasts. Maintain BUY and DCF (WACC 10%) TP of S$0.445. Stock catalysts expected from potential out-licensing deals and sixfold increase in production capacity by FY22e
HK Reports – Read up on our Hong Kong reports here
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