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Writer's pictureAda Tam Ying Ying
Nov 3, 20237 min read

2 Nov2023 Reports

Updated: Nov 6, 2023


SGX

kopi-C with Centurion Corporation’s CEO: “We offer residents more than just a place to stay”












 

Phillip Capital Market Reports:


Phillip Daily Morning Note :




US Market (By Phillip Global Markets Night Desk)

2 November 2023

Fed Heads to the Sidelines

The Fed wrapped up its Open Market Committee meeting on Wednesday and, as expected, held the federal funds rate steady at 5.25%-5.50%. This followed a hike last month, the eleventh by the central bank over 16 months. The fed funds rate is now the highest it has been since 2000 and above the long-term average of 4.4%. The hikes have been bringing inflation down. The latest core CPI reading was 4.1%, down from 9.1% in July 2022, and the core PCE Price Index reading was 3.7%. Both remain well above the Fed's target of 2.0%. Now the drama will build for the next meeting. Will the Fed hike again or stay on the sidelines? According to the latest fed funds "dot plot" forecasts by the governors, the central bank's target for the rate at year-end is 5.63%. That's one more hike. We are not sure that's a good idea. Our forecast calls for the Fed to keep its target rate steady into mid-2024 as inflation continues to moderate. Yes, shelter and transportation costs remain stubbornly high, but energy prices have declined, and we don't see the need to keep raising rates. What's more, the Fed has another mandate besides keeping inflation low. It is also supposed to promote maximum employment. While the latest jobs reports have been consistent with GDP growth, we think the full impact of the Fed's decisions over the past year have yet to be felt by the consumer. Lastly, the Fed also appears willing to sit back and allow the bond market to do some of its work. The sharp upward trend at the long end of the yield curve over the past six months has no doubt contributed to tighter financial conditions.

Market Wrap

Stock futures rose and bond yields fell on speculation the Federal Reserve is done with interest-rate hikes. The pound gained after the Bank of England ruled out any possibility of letting up on its fight against inflation for the foreseeable future.

S&P 500 contracts signaled the US benchmark gauge will advance for a fourth consecutive session. Nasdaq 100 contracts climbed 1%, with Qualcomm Inc., the largest seller of smartphone chips, rallying on a bullish forecast. Apple Inc. — which is due to report earnings after the closing bell — also gained. Treasury 10-year yields fell six basis points to 4.67%. The dollar dropped against all of its developed market peers.

Today's Big News

  • Private Equity Pays Buyout Loans With More Debt to Save Cash

  • Israel Latest: Troops Push Deeper Into Gaza Amid Heavy Fighting

  • Abu Dhabi Weighs Investment Pledges Worth $50 Billion for India

  • Peloton Tumbles After Giving Weak Quarterly Sales Outlook

  • Six Flags, Cedar Fair to Merge in $8 Billion Theme Park Deal (1)

  • US Housing Market Becomes Impossible Mess With No End in Sight






 

OCBC


First Solar Inc (FSLR US) - Relatively de-risked earnings profile with substantial backlog



Market Pulse (02 November 2023)




 

DBS


Market News

  1. Fed maintains Fed fund rates at 5.25 – 5.5% for second consecutive meeting, upgrades assessment of US economy

  2. Qualcomm delivers above-estimates results and guidance, signalling chip slump recovery

  3. Toyota’s latest quarterly profit more than doubles y-o-y; management raises full-year guidance (March year-end)

Latest changes: DBS Equity Picks

DBS Equity Picks have consistently outperformed market benchmarks since inception.

NEW ADDITION(S)

  1. Add Mapletree Logistics Trust to Dividend category (Singapore)


Singapore REIT

Be brave when the street is fearful

  1. High benchmark yields a near-term headwind for the S-REITs, but valuations (P/B below -1SD) imply that it is time to add selectively

  2. Positives from recent management meetings reinforce our stance that retail, industrials remain most resilient; hotels’ growth trajectory remains on an uptrend

  3. S-REIT yield spreads vs. alternatives (banks & bonds) below mean, implying any meaningful inflow into the sector will still be delayed

  4. Is a turning point on the horizon?

  5. Click here to read our views

Singapore Office: Global Office

WeWork may finally throw in the towel?

  1. Media reported WeWork is considering to file for Chapter 11 in New Jersey as early as next week

  2. SREIT’s exposure to WeWork is not huge, with the largest being CICT at c.2.4% of gross rental income (GRI)

  3. While there may be some impact, we expect it to be contained especially for Singapore, as it is still operating well and profitable

  4. Which counters do we see at higher risk?

  5. Click here to read our views

China/HK Equity Strategy

Takeaways from National Financial Work Conference

  1. The twice-a-decade National Financial Work Conference pledged to comprehensively strengthen financial oversight, effectively resolve and prevent risks

  2. The top leaders vow to establish a long-term mechanism to resolve local government financing vehicle (LGFV) issue; the meeting also reiterated that financial institutions should treat POE and SOE property developers equally

  3. Guidance aligns closely with what were discussed in recent policy meetings

  4. How much impact on the market do we expect?

  5. Click here to read our views

Digital Core REIT (DCREIT SP)

Resolution to a long-standing overhang

  1. Proposed overall package solution towards portfolio diversification and positioning for growth

  2. Transactions involving asset recycling and leases amendment a trade-off between near-term dilution to DPU for more certainty and improved portfolio diversification

  3. Leveraged on Sponsor’s pipeline to mitigate further dilution to earnings while building on future growth prospects

  4. Are we net positive on DCREIT?

  5. Click here to read our views

Budweiser Brewing Company (1876 HK)

Performance in China intact

  1. Premiumisation trend in China intact, with high-single-digit average selling price (ASP) growth to be sustained in 4Q23

  2. Expect China to remain the key growth driver with supportive volume growth in 4Q23 on a low base

  3. Sequential improvement in South Korea to continue despite 5%/7% trim in FY23/FY24 earnings to factor in the near-term pressure there

  4. Do we anticipate margin improvements ahead?

  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: Thursday, November 02, 2023

Click on the link for Greater China Daily.



UOBKH: Retail Market Monitor: Thursday, November 02, 2023



UOBKH: Regional Morning Meeting Notes: Thursday, November 02, 2023 [GC Alpha Picks, 9987 HK, 600519 CH, BBNI IJ, CAB MK, FFB MK, SG REITs, SSG SP, TH Alpha Picks, TH Media, TH Hotel]


 

KGI


Top Stories, 2 Nov 2023


1. Asia markets rise after Fed holds rates

2. CME Group's E-mini S&P 500 Futures provide one of the most efficient, liquid and cost-effective ways to gain market exposure to the S&P 500 Index.

Find out more: http://bit.ly/KGI_CMEemini

3. US Fed keeps rates unchanged; Powell hedges on possible end of tightening campaign

4. Oil falls to settle at 3-week low as Fed

5. Micro stocks shine in China's flagging share market


6. Gold Price Forecast: XAU/USD stages a modest recovery above $1,980 after Fed rate pause



Technical Analysis: 2 November 2023

🇸🇬 SG

Aztech Global Ltd. (AZTECH SP)

Sembcorp Industries Ltd. (SCI SP)

🇭🇰 HK

Huaneng Power International Inc (902 HK)

Datang International Power Generation Co Ltd (991 HK)



 

CIMB





 

Lim&Tan


MORNING UPDATE 02 NOV 2023: FINANCIAL MARKETS, DBS, FRASERS LOG & COMM TRUST, BCA RESEARCH / BLOOMBERG MACRO FINANCIAL NEWS




 

MayBank



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