Daily Morning Note – 9 April 2019
WEEKLY MARKET OUTLOOK WEBINAR
Register HERE for MONDAY’s 11.15am webinar.
Archived webinars available.
YOUR PHILLIP SUMMARY
Saudi Aramco, the world’s largest oil company, has received $75 billion in orders for its debut bond sale, kickstarting an offering with yields likely to fall in line or below Saudi Arabia’s sovereign debt. It’s rare for bonds of a state-owned company to yield less than the sovereign, and the demand reflects intense investor appetite for high-quality paper.
Asian stocks looked set to edge higher at the open after U.S. shares clocked an eighth day of gains to trade within 1.2 percent of their September record. The S&P 500 rose 0.1 percent and the Nasdaq Composite added 0.2 percent. Bucking the trend, the Dow lost the most in two weeks. Shares of General Electric Co. plunged the most in the S&P 500 after a JPMorgan analyst recommended selling the company’s stock, damping enthusiasm for a nascent turnaround. The Stoxx Europe 600 fell 0.2 percent as German equities retreated for the first time in eight sessions amid losses in BMW AG, which fell after saying it’s likely to take a charge exceeding 1 billion euros ($1.1 billion).
RESEARCH REPORT
US Banking Sector – Loans creeping up and valuations cheap
Analyst: Edmund Xue
– We maintain an Overweight recommendation for the U.S. Banking Sector.
Valuations are below historical average.
– Loans growth is creeping upwards, mainly driven by strong commercial and
industrial loan growth and offset by weak mortgage loans.
– Asset quality will remain healthy as banks have tightened lending policies since
GFC
– Long-term treasury yields will edge upwards but remain range bound against a
backdrop of slower economic growth
– Tighter NIM as funding costs are increasing at a higher pace than lending rates
Ascott Residence Trust – Best of both worlds- stability and growth
Analyst: Natalie Ong
– Income stability through geographic diversification and lease structure
– Inorganic growth from S$880mn debt headroom, ROFR pipeline of 20
properties and tapping on sponsor’s growth trajectory
– Less Capex and Opex intensive requirements for Serviced Residences
– Initiate coverage with BUY rating and S$1.36 target price, implying a 21.5%
upside
Phillip Strategy – Stay invested for the recovery
– We remain positive on equities and raised our STI target to 3600 from 3400
– Expect a renewed upturn in global growth. Financial conditions have eased and
there is fiscal support to revive economic growth.
– In our Phillip Absolute 10 model portfolio, we added NetLink Trust, Ascott REIT
and Singtel. We removed Ascendas REIT, CapitaLand Commercial Trust and Geo
Energy.
BREAKING NEWS
US stocks opened lower on Monday, pausing after the S&P 500’s seven-day winning streak, as investors braced for what could be the first decline in corporate earnings since 2016 and a drop in Boeing Co’s shares hit the Dow industrials.
US officials are “not satisfied yet” about all the issues standing in the way of a deal to end the US-China trade war but made progress in talks with China last week, a top White House official said on Monday.
Brexit-supporting lawmaker calls for no confidence vote in PM May.
TUAN Sing Holdings has acquired the remaining 51 per cent stake in PT Titian Damai Mandiri (TDM) through its indirect wholly owned subsidiary, Lachenalia, from PT Graha Baru Khatulistiwa for 26.010 billion Indonesian rupiah (approximately S$2.48 million).
A MEMORANDUM of understanding (MOU) and loan agreement that Ace Achieve Infocom entered into have been terminated after its shares were suspended from trading.
The Singapore Exchange (SGX) is launching Asia’s first total return futures (TRF) on May 13 as it sharpens its focus on futurised derivatives.
Singapore’s financial regulator said it hasn’t uncovered any impropriety by DBS Group Holdings Ltd in arranging the sale of securities by troubled Singaporean water and power company Hyflux Ltd in 2016.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research
| Disclaimer |
| 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. |
| Confidentiality Note |
| 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. |
