SGX
Economic Calendar :
Refinitiv :
Phillip Capital Market Reports:
Phillip Daily Morning Note :
US Market (By Phillip Global Markets Night Desk)
12 October 2023
Earnings Near An Inflection Point
The important 3Q23 EPS season is about to get underway -- important because it could signal a return to earnings growth after three straight negative EPS quarters. Consensus estimates for 3Q23 range from low-single-digit growth to low-single-digit declines. Energy could be the wildcard in 3Q23 EPS. Although Energy represents only 4.0%-4.5% of S&P market capitalization, S&P 500 2Q23 earnings less Energy were about flat year-over-year in 1H23. Most models show 3Q Energy earnings down in high-single-digits, and earnings excluding Energy are forecast up in the mid-single-digits. The spike in Energy prices began in June 2023, and Wall Street may be underestimating Energy earnings potential in 3Q and particularly in 4Q23. For 2023, our S&P 500 earnings estimate remains $226, implying low-single-digit growth from 2022 levels. Following a low-single-digit EPS decline for 1Q23 and 2Q23 EPS, we look for growth in 3Q23 EPS, but at less than 3%. As well, we are modeling 4Q23 continuing operations EPS to grow about 11% against a weak year-earlier comparison. Remember, companies always exceed earnings expectations. Second-quarter earnings declined 3%-4% year-over-year, better than preliminary expectations of a high-single-digit decline. Those 2Q results were generally of high quality: just over four-fifths of companies exceeded consensus expectations and the average beat against expectations was above 7%. Over the preceding decade, about 75% of S&P 500 companies exceeded expectations, and those companies on average topped consensus quarterly EPS estimates by about 6%.
Market Wrap
Stock futures trimmed gains after hotter-than-estimated inflation data bolstered concern of another Federal Reserve rate hike this year, evne if the central bank decides to pause next month.
S&P 500 futures rose 0.2% as of 8:32 a.m. New York time. The yield on 10-year Treasuries advanced four basis points to 4.60%. The Bloomberg Dollar Spot Index rose 0.1%.
Today's Big News
Israel Latest: Blinken Urges Israel to Avoid Harming Civilians
Ex-Barclays CEO Staley ‘Recklessly’ Misled Watchdog, Probe Finds
UK’s FCA Bans Ex-Barclays CEO Staley From Senior Financial Roles
IMF Latest: Up To Eight African Nations Need Debt Restructuring
Meta Working to Prevent ‘Inappropriate’ Replies From AI Chatbots
F1 Mogul Ecclestone Pleads Guilty to £400 Million Fraud Charge
OCBC
DBS
September FOMC: Majority of fed officials judge that just one more rate hike increase is appropriate
Producer Price Index rose 0.5% in September, above estimates of 0.3%, on higher gas and food prices
Oil prices falls over 2% as top OPEC producer Saudi Arabia pledges to stabilise market
Latest changes: DBS Equity Picks
DBS Equity Picks have consistently outperformed market benchmarks since inception.
NEW ADDITION(S)
Increase SIA Engineering in Growth category (Singapore)
Singapore Industrial REITs
Concerns on Australia and Europe
overdone
Industrial S-REITs with Australia, UK, and Europe exposure unjustifiably sold off in our opinion
Concerns on revaluation losses overdone with market pricing in more than 100bps expansion in cap rates at current share price levels
We estimate gearing and ICRs (interest coverage ratio) can mostly remain within limits, even in stress test scenarios, vindicating our view that they are oversold
Who are our are the top ”value buy” S-REIT picks in this space?
Click here to read our views
China Property Weekly Digest
Oct begins on a low note
Average weekly GFA sold in 26 cities we track dropped 64.7% w-o-w for the week ended 8 Oct, translating to 34.9% y-o-y decline MTD (vs. 25.5% in Sep-23)
No. of new units launched in 11 key Tier 1 and 2 cities slid 66% w-o-w, marking the lowest level in recent two months
Average short-selling interest rose 5ppts to 20% last week; average southbound interest decreased 0.9bps to 12.11%
How has average sell-through rate shifted in the past week?
China/HK equity strategy
The return of ‘National Team’
China’s sovereign wealth fund Central Huijin increased its stakes in all Big Four Banks, the first time since 2015
This is a symbolic move demonstrating 1) policy makers’ confidence in economic recovery and 2) commitment to revive the capital market
The move, coupled with the retreating UST yield and USD, reignited policy hope and signs of economic stabilization, will support market sentiment in short term
Which sectors will stand to benefit?
Sunny Optical Technology (2382 HK)
Sep 2023 handset lens shipments increased 17% y-o-y, extending the positive trend since May
Handset lens set (HLS) shipments in Sept 2023 increased by 17% y-o-y, slightly ahead of market expectations
Sustaining growth in shipment reaffirms our view of smartphone market resurgence in 2H23
Expect HLS shipments to maintain growth in the teens in October
What growth in revenue is in our forecast going into FY24F?
Click here to read our views
DBS Group Research | Equity Picks
Singapore Equity Picks: Read more
Hong Kong Equity Picks: Read more
UOB
REG: Monthly Technical Regional Indices Watch
Click on the link for details.
UOBKH: Retail Market Monitor: Thursday, October 12, 2023
Click on the link for details.
UOBKH: Country Dailies: Thursday, October 12, 2023
Click on the link for Greater China Daily.
Click on the link for Indonesia Daily.
Click on the link for Malaysia Daily.
Click on the link for Singapore Daily.
Click on the link for Thailand Daily.
UOBKH: Regional Morning Meeting Notes: Thursday, October 12, 2023 [GC Banking, 2232 HK, 13 HK, 9866 HK, 1810 HK, BUKA IJ, FFB MK, PETD MK, STM SP, CPALL TB, DELTA TB]
Click on the link for details.
KGI
Top Stories, 12 Oct 2023
1. Japan leads gains in Asia as investors shake off pressures from Hamas attack
2. Micro Ether Futures now live on CME Group. Enjoy the same features of CME's larger Ether futures (ETH) at a fraction of the size and with lower margins, enabling traders of all sizes to manage ether price risk and add diversification.
Find out more: https://www.kgieworld.sg/futures/cme-micro-ether-futures
3. China consumers are ‘not out of the woods yet’: Bank of America
4. Uncertainty, growth risks put US Fed on cautious footing last month, minutes show
5. Oil falls over 2% after Saudi pledge; investors keep wary eye on Israel
6. AUD/USD floating higher ahead of Aussie inflation expectations, US CPI in the barrel for Thursday
Technical Analysis: 12 October 2023
🇸🇬 SG
Frencken Group Ltd. (FRKN SP)
AEM Holdings Ltd. (AEM SP)
🇭🇰 HK
Wuxi Biologics Cayman Inc (2269 HK)
WuXi AppTec Co Ltd (2359 HK)
Read More: https://www.kgieworld.sg/research/oct12ta23
CIMB
SIN: Aztech Global Ltd - Net profit likely rose 10% qoq in 3Q23F (ADD - Maintained)
SIN: Centurion Corporation Ltd - New interim standards for SG worker dorms (ADD - Maintained)
SIN: United Overseas Bank - 3Q23F: Volumes over margin (ADD - Maintained)
ASEAN: CGS-CIMB ASEAN Daily - 12 October 2023
Equity Research Reports....
▌ RECOMMENDATION CHANGES & INITIATIONS
PH: Metropolitan Bank and Trust Co (ADD, tp:PHP71.67) (HC) - Outlook upbeat on margin tailwinds (11/10)
▌ TARGET PRICE CHANGES
MAL: Genetec Technology Bhd (ADD, tp:MYR3.60▼) - Encouraging traction in the BESS segment (11/10)
SIN: Aztech Global Ltd (ADD, tp:SGD1.23▲) - Net profit likely rose 10% qoq in 3Q23F (11/10)
SIN: Venture Corporation (ADD, tp:SGD16.61▼) - 3Q23F net profit likely still weak (11/10)
▌ ECONOMIC & STRATEGY NOTES
THB: Strategy Note - Stock picks amid policy risks (11/10)
▌ SECTOR & COMPANY NOTES
IND: Construction (UNDERWEIGHT) - Indo Infra Week: Getting the bigger piece of private investment to Nusantara (12/10)
SIN: Centurion Corporation Ltd (ADD, tp:SGD0.60) - New interim standards for SG worker dorms (11/10)
SIN: United Overseas Bank (ADD, tp:SGD33.30) (HC) - 3Q23F: Volumes over margin (11/10)
▌ RECENT 'IDEAs OF THE DAY'...
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)
SIN: Singapore Post Ltd (ADD▲, tp:SGD0.60▲) - What’s next? (18/9)
THB: Retail (OVERWEIGHT) (ESG) - Stronger after the storm (15/9)
APAC: ASIA Pacific Daily - 12 October 2023
Equity Research Reports....
▌ RECOMMENDATION CHANGES & INITIATIONS...
PH: Metropolitan Bank and Trust Co (ADD, tp:PHP71.67) (HC) - Outlook upbeat on margin tailwinds (11/10)
▌ TARGET PRICE CHANGES...
KR: Douzone Bizon (HOLD, tp:KRW28,000.00▼) - Stalled growth engine (11/10)
KR: Modetour Network (HOLD, tp:KRW16,000.00▼) - Signs of recovery already priced in (11/10)
MAL: Genetec Technology Bhd (ADD, tp:MYR3.60▼) - Encouraging traction in the BESS segment (11/10)
SIN: Aztech Global Ltd (ADD, tp:SGD1.23▲) - Net profit likely rose 10% qoq in 3Q23F (11/10)
SIN: Venture Corporation (ADD, tp:SGD16.61▼) - 3Q23F net profit likely still weak (11/10)
▌ STRATEGY & ECONOMIC NOTES...
THB: Strategy Note - Stock picks amid policy risks (11/10)
▌ SECTOR & COMPANY NOTES...
IND: Construction (UNDERWEIGHT) - Indo Infra Week: Getting the bigger piece of private investment to Nusantara (12/10)
KR: LG Electronics (ADD, tp:KRW140,000.00) - 3Q23P OP surprise, thanks to cost control (11/10)
KR: Samsung Electronics (ADD, tp:KRW115,000.00) (HC) - 3Q23 OP a beat on memory profitability (11/10)
SIN: Centurion Corporation Ltd (ADD, tp:SGD0.60) - New interim standards for SG worker dorms (11/10)
SIN: United Overseas Bank (ADD, tp:SGD33.30) (HC) - 3Q23F: Volumes over margin (11/10)
▌ RECENT 'IDEAs OF THE DAY'...
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)
HKG: Property - Overall - Time to lift some of the “harsh measures” (27/9)
CHN: Navigator-Strategy - Ride out of the bottom (25/9)
Lim&Tan
MayBank
Comentários