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Writer's pictureAda Tam Ying Ying
Nov 7, 202310 min read

07 Nov2023 Reports


SGX


5 in 5 with Procurri - Advancing Sustainability in IT













 

Phillip Capital Market Reports:


Phillip Daily Morning Note :




US Market (By Phillip Global Markets Night Desk)

7 November 2023

Stock Valuations Move Back Toward Normal

Our bond/stock asset-allocation model is indicating that bonds are the asset

class offering the most value at the current market juncture, as interest rates

have risen. But stocks are not seriously overvalued, and the recent decline in

the benchmark 10-year government bond yield has improved equity

valuations. Our model takes into account levels and forecasts of short-term

and long-term government and corporate fixed-income yields, inflation, stock

prices, GDP, and corporate earnings, among other factors. The output is

expressed in terms of standard deviations to the mean, or sigma. The mean

reading from the model, going back to 1960, is a modest premium for stocks,

of 0.15 sigma, with a standard deviation of 1.0. The current valuation is a

0.76 sigma premium for stocks, inside the normal range and down from 0.98

last month. Other valuation measures also show reasonable multiples for

stocks. The current forward P/E ratio for the S&P 500 is 16.7, within the

normal range of 10-21 and down from 22 a year ago. The current S&P 500

dividend yield of 1.5%, while below the historical average of 2.9%, is up

from an ultralow 1.2% as recently as 2021. We expect the results from our

valuation model to improve, as interest rates start to decline next year and

EPS growth picks up. Based on the current valuation levels, as well as interest

rate and earnings forecasts, we have called for a recovery in stock prices in

2023 from bear-market lows. Our current recommended asset-allocation

model for moderate accounts is 67% growth assets, including 65% equities

and 2% alternatives; and 33% fixed income, with a focus on core

opportunistic segments of the bond market. On duration, we recommend

focusing on the short end of the curve.


Market Wrap

Stocks declined and the dollar rose after comments by Minneapolis Fed President Neel Kashkari dampened hopes of speedy interest rate cuts from the US central bank.

S&P 500 futures shed about 0.3%, indicating that the US equity benchmark will snap a six-day winning streak, while Europe’s Stoxx 600 index posted a similar loss. West Texas Intermediate crude dropped below $80 a barrel for the first time in more than two months. The dollar strengthened.


Today's Big News

  • WeWork Goes Bankrupt, Signs Pact With Creditors to Cut Debt

  • Israel Latest: Netanyahu Sees ‘Indefinite’ Gaza Security Control

  • Gorman Signals Exit as Morgan Stanley Chair by End of 2024

  • US Trade Deficit Widens by More Than Forecast on Goods Demand

  • UBS Seeks to Get Rid of $5 Billion in Rich Clients’ Assets

  • Uber Delivers Earnings, Outlook Beat on Robust Trip Demand


 

OCBC


China Strategy: Singles Days shed more light on consumption sentiment

OIR SolarEdge Technologies (SEDG US) - 4Q23 guidance well below given channel clearing overhang

OIR Sector: Global Travel – Is It Over Now?

OIR Market Pulse (07 November 2023)




 

DBS


Market News

  1. OpenAI announced its latest GPT-4 Turbo model with plans to cut pricing fees

  2. Citigroup considers job cuts of at least 10% in reorganization discussions

  3. US health insurer Cigna group explores sale of its government health insurance business


Singapore

Market View Update: A Higher-low pullback

  1. Two things we said recently have panned out well: #1 STI to recover off the 3,040 level, #2 US 10Y yield to reach a major peak at slightly above the 5% mark

  2. STI’s rally was powered by optimism that the FED is done hiking rates, attractive forward PE valuation and oversold technical reading

  3. While STI may still have upside towards 3220, why do we think that the market rebound is likely to turn less broad based in the immediate term?

  4. Click here to read our views

ASEAN stocks

Seizing opportunities in China and +1

  1. China growth stabilizing; policies turning supportive a signal to re[1]look at stocks with Chinese exposure

  2. Sectors within ASEAN that offer exposure to China, with lower political/policy risk: Commodities, Beneficiaries / Critical infrastructure providers under China+1 strategy

  3. Who do we think are key beneficiaries of this China +1 trend?

  4. Click here to read our views

Sembcorp Industries Ltd (SCI SP) Investor Day 2023 - Three key

takeaways

  1. Doubling in renewable capacity to 25GW by 2028, funded by OCF (operating cash flow), debt and capital recycling; no equity fund raising required for the new goals

  2. Projecting +25% 6-year CAGR for Renewables while -2% for Conventional Energy in 2022-2028; implying 7.5% CAGR in group profit assuming steady urban solution earnings

  3. Uniquely positioned to drive energy transition through renewables and decarbonisation Initiatives

  4. Has share prices priced in a normalisation of electricity prices?

  5. Click here to read our views

AIA Group (1299 HK)

China expansion intact

  1. 3Q23 VONB up 35% y-o-y, beating expectations

  2. Double-digit VONB (value of new business) y-o-y growth seen in HK, China, ASEAN, India

  3. China growth likely to reaccelerate with double-digit growth in active agent headcount, stable product mix

  4. Factoring in stronger-than-expected VONB growth, weaker investment sentiment

  5. What growth are we pricing in for FY24F?

  6. Click here to read our views

Prudential PLC (2378 HK)

9M23 VNB beats expectations

  1. Prudential 9M23 VNB (value of new business) growth beat, with an increase of 48% y-o-y by excluding economic impacts

  2. Revenue growth was mainly driven by robust APE (annual premium equivalent) growth and improved VNB margin due to favorable product mix shift

  3. APE increased 40% y-o-y to $4.4b, led by HK with increased sales to both Mainland China Visitors and domestic customers

  4. Do we see appetite for saving products remaining elevated?

  5. Click here to read our views

DBS Group Research | Equity Picks

Singapore Equity Picks: Read more

Hong Kong Equity Picks: Read more



 

UOB



UOBKH: Country Dailies: Tuesday, November 07, 2023

Click on the link for Greater China Daily.

UOBKH: Regional Morning Meeting Notes: Tuesday, November 07, 2023 (PM EDITION) - Additional: DBS SP [GC Commodities, MYOR IJ, PMAH MK, TNB MK, DBS SP, NETLINK SP, RFMD SP, SIE SP, SCI SP, TIDLOR TB, AMATA TB]



UOBKH: Retail Market Monitor: Tuesday, November 07, 2023




UOBKH: Regional Morning Meeting Notes: Tuesday, November 07, 2023 [GC Commodities, MYOR IJ, PMAH MK, TNB MK, NETLINK SP, RFMD SP, SIE SP, SCI SP, TIDLOR TB, AMATA TB]



 

KGI


Technical Analysis: 7 November 2023

🇸🇬 SG

Frencken Group Ltd (FRKN SP)

City Developments Ltd (CIT SP)

🇭🇰 HK

Galaxy Entertainment Group Ltd (27 HK)

Sands China Ltd (1928 HK)



 

CIMB


Trendspotter of the day (SIN/HKG/MAL): 7th November 2023

Please refer to below for the technical charts of the day.

SIN

  • Uptrend is back

  • Bullish continuation likely, larger accumulation done

HKG

  • Potential triple bottom

  • Bullish continuation is set

MAL

  • Room on further upside?

  • Short-term uptrend?




ASEAN: CGS-CIMB ASEAN Daily - 07 November 2023

Equity Research Reports....


▍IDEA OF THE DAY (IOD)...

MAL: Utilities - Overall (OVERWEIGHT) - Malaysia, ASEAN’s renewable battery (6/11)

CGS-CIMB’s inaugural ESG and Sustainability Conference shed valuable insights into Malaysia’s energy transition ambitions and key challenges. At the conference, the government said it is committed to the NETR while industry leaders contributed real-world insights and valuable perspectives. Malaysia’s utility sector remains well-entrenched in the overall theme, in our view, and we see Tenaga as the key enabler and beneficiary of the NETR.

▌ RECOMMENDATION CHANGES & INITIATIONS

SIN: Riverstone Holdings (ADD▲, tp:SGD0.75▲) - Emerging stronger (6/11)

THB: Global Power Synergy (HOLD▼, tp:THB45.50▼) - 3Q23 EPS driven by lower energy cost (6/11)

▌ TARGET PRICE CHANGES

IND: Semen Indonesia (ADD, tp:IDR8,000.00▼) (HC) - Bulk cement to drive domestic sales (6/11)

MAL: Pentamaster Corp Bhd (HOLD, tp:MYR5.24▼) - Automotive growth could take a breather (6/11)

THB: Thai Union Group (ADD, tp:THB17.30▲) - Looking forward to a strong 4Q23F (6/11)

▌ ECONOMIC & STRATEGY NOTES

IND: Economic Update - 3Q growth slowed but 4Q fiscal space is large (6/11)

THB: Strategy Flash Note - New list of sustainable investment companies (6/11)

THB: Economic Update - Price caps suppress Thailand’s CPI (6/11)

▌ SECTOR & COMPANY NOTES

MAL: Berjaya Food Berhad (ADD, tp:MYR1.00) - Thoughts on Starbucks boycott incident (6/11)

SIN: DBS Group (HOLD, tp:SGD35.30) (ESG) - 3Q23: Steady NIM, fees; higher credit costs (6/11)

SIN: DBS Group (HOLD, tp:SGD35.30) (ESG) - Holding steady into FY24F (6/11)

SIN: Netlink NBN Trust (ADD, tp:SGD0.95) - Still awaiting conclusion of regulatory review (6/11)

THB: Central Retail Corporation (ADD, tp:THB46.25) (ESG) - Visiting the first GO Wholesale store (6/11)

THB: Ngern Tid Lor (ADD, tp:THB34.25) - Decent 3Q23 results (7/11)

▌ RECENT 'IDEAs OF THE DAY'...

MAL: Strategy Note - Budget 2024: policy continuity (14/10)

MAL: Economic Focus - Budget 2024: Raise revenue, cut spending (14/10)

THB: Hana Microelectronics (ADD▲, tp:THB80.00▲) (ESG) - Multiple tailwinds to drive OP growth (10/10)

MAL: Strategy Note - One step at a time (4/10)

MAL: Economic Focus - Budget 2024 Preview: Tightening purses (2/10)



APAC: ASIA Pacific Daily - 07 November 2023

Equity Research Reports....

▍IDEA OF THE DAY (IOD)...

MAL: Utilities - Overall (OVERWEIGHT) - Malaysia, ASEAN’s renewable battery (6/11)

CGS-CIMB’s inaugural ESG and Sustainability Conference shed valuable insights into Malaysia’s energy transition ambitions and key challenges. At the conference, the government said it is committed to the NETR while industry leaders contributed real-world insights and valuable perspectives. Malaysia’s utility sector remains well-entrenched in the overall theme, in our view, and we see Tenaga as the key enabler and beneficiary of the NETR.

▌ RECOMMENDATION CHANGES & INITIATIONS...

SIN: Riverstone Holdings (ADD▲, tp:SGD0.75▲) - Emerging stronger (6/11)

THB: Global Power Synergy (HOLD▼, tp:THB45.50▼) - 3Q23 EPS driven by lower energy cost (6/11)

▌ TARGET PRICE CHANGES...

CHN: Haier Smart Home (ADD, tp:CNY31.50▼) - Sales recovery appears on track (6/11)

CHN: Marubi Biotechnology (ADD, tp:CNY39.30▼) - Strong online sales growth expected in 4Q23F (6/11)

IND: Semen Indonesia (ADD, tp:IDR8,000.00▼) (HC) - Bulk cement to drive domestic sales (6/11)

KR: KT Corp (ADD, tp:KRW37,000.00▼) - B2B-driven sales growth intact (6/11)

KR: LG Uplus Corp (ADD, tp:KRW12,000.00▼) - DC capacity expansion from 2024F (6/11)

KR: SK Telecom (ADD, tp:KRW55,000.00▼) - Non-telco business to support topline growth (6/11)

MAL: Pentamaster Corp Bhd (HOLD, tp:MYR5.24▼) - Automotive growth could take a breather (6/11)

THB: Thai Union Group (ADD, tp:THB17.30▲) - Looking forward to a strong 4Q23F (6/11)

▌ STRATEGY & ECONOMIC NOTES...

IND: Economic Update - 3Q growth slowed but 4Q fiscal space is large (6/11)

THB: Strategy Flash Note - New list of sustainable investment companies (6/11)

THB: Economic Update - Price caps suppress Thailand’s CPI (6/11)

▌ SECTOR & COMPANY NOTES...

CHN: Environmental (NEUTRAL) - Carbon Neutrality Research: Policy and News Update (6/11)

KR: NAVER (ADD, tp:KRW260,000.00) (HC) - Cost under control (6/11)

MAL: Berjaya Food Berhad (ADD, tp:MYR1.00) - Thoughts on Starbucks boycott incident (6/11)

SIN: DBS Group (HOLD, tp:SGD35.30) (ESG) - 3Q23: Steady NIM, fees; higher credit costs (6/11)

SIN: DBS Group (HOLD, tp:SGD35.30) (ESG) - Holding steady into FY24F (6/11)

SIN: Netlink NBN Trust (ADD, tp:SGD0.95) - Still awaiting conclusion of regulatory review (6/11)

THB: Central Retail Corporation (ADD, tp:THB46.25) (ESG) - Visiting the first GO Wholesale store (6/11)

THB: Ngern Tid Lor (ADD, tp:THB34.25) - Decent 3Q23 results (7/11)

▌ RECENT 'IDEAs OF THE DAY'...

MAL: Strategy Note - Budget 2024: policy continuity (14/10)

MAL: Economic Focus - Budget 2024: Raise revenue, cut spending (14/10)

THB: Hana Microelectronics (ADD▲, tp:THB80.00▲) (ESG) - Multiple tailwinds to drive OP growth (10/10)

MAL: Strategy Note - One step at a time (4/10)

MAL: Economic Focus - Budget 2024 Preview: Tightening purses (2/10)





 

Lim&Tan


MORNING UPDATE 07 NOV 2023: FINANCIAL MARKETS, CAPITALAND ASCOTT TRUST, FRASERS HOSPITALITY TRUST, BCA RESEARCH / BLOOMBERG MACRO FINANCIAL NEWS




 

MayBank



Raffles Medical Group | Hitting the brakes; D/G HOLD Eric Ong

Netlink NBN Trust | Minor speed bumps Kelvin Tan





MAYBANK SECURITIES - EM Asia Headlines 071123

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