My interview with ZaoBao :
SGX
Phillip Capital Market Reports:
Phillip Daily Morning Note :
US Market (By Phillip Global Markets Night Desk)
25 October 2023
Dollar in Rally Mode
The dollar has been rallying on the strength of the U.S. economy and renewed sentiment that the Fed might pull the trigger on one more rate hike by year-end. As U.S. interest rates have surged, yield-hungry investors are moving toward U.S. securities to take advantage, thus boosting the dollar. Indeed, the greenback is up 3% from July. But that is short-term news. Before this recent two-month rally, the dollar had been on a wild ride. The greenback spiked early in the pandemic, when global investors flocked to the security of assets denominated in U.S. currency. After peaking in April 2020, the dollar declined into 2021, but rose again for much of 2022, propelled by uncertainty surrounding the Russian invasion of Ukraine, soaring inflation, and higher global interest rates. By October 2022, on a real trade-weighted basis, the dollar was 23% above the average valuation over the past 20 years. Even now, it is 17% higher than normal. We anticipate a trading range around current levels for the greenback for the balance of the year. That's because we think U.S. GDP growth may be poised to slow due to the Fed's rate hikes. We also expect higher rates to increase the interest payments as a percent of GDP from recent lows of 1.5%, putting a modest strain on the U.S. balance sheet. Lastly, the current still-elevated valuation of the greenback implies that other currencies -- and even gold or other commodities -- are possibly undervalued, and we would expect investors (such as the petrodollar-fueled sovereign-wealth funds) to bid up those values at a measured pace over time.
Market Wrap
US equity-index futures slipped after Microsoft Corp. and Google’s parent Alphabet Inc. delivered a mixed picture of big tech earnings, setting the stage for peers still reporting this week.
Contracts on the Nasdaq 100 sank 0.4% and those on the S&P 500 were down 0.3%. Alphabet fell as much as 7% in premarket trading after its cloud unit reported a smaller than expected profit. Microsoft, on the other hand, climbed after results in its cloud business beat expectations. Meanwhile, Texas Instruments Inc. dropped after a disappointing revenue forecast suggested that demand remains sluggish for a broad range of electronic components.
Today's Big News
- Israel Latest: Qatar Says More Hostages Could be Freed Soon
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- Adani Auditor EY Faces Inquiry by India’s Accounting Regulator
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- China Signals No Tolerance for Sharp Slowdown With Rare Aid
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- CFA Final Exam Pass Rate Slips to 47%, Below Historic Average
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- China Set to Release Long-Awaited Methane Plan Before COP28
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- Hurricane Otis Lashes Mexico After Landfall Near Acapulco
OCBC
DBS
Market News
Euro zone Composite Purchasing Managers’ Index (PMI) fell to 46.5 in Oct on lower demand across the region
Microsoft’s 3Q EPS of US$2.99 beats estimates on strong cloud services revenue growth
Barclays’ 3Q pre-tax profit of GBP1.9bn beats estimates, flagged interest margin pressure in UK
Chinese outbound travel beneficiaries
Another sign pointing to a positive 3Q
Watch Singapore/Hong Kong inbound tourism names as FEHT’s 3Q23 business updates sets another positive tone
FEHT reported higher RevPAR in 3Q (S$150, +44% y-o-y) supported by improved occupancy and average daily rates
3Q visitor arrivals to Singapore had been strong (+72.5% yoy), driven by the resurgence of Chinese visitors over the summer holidays in July and August
Which are the stocks to watch?
Click here to read our views
China Real Estate
Sentiment waning after Golden Week
Homebuyer sentiment improved in Sep due to policy easing, but began to fade after the Golden Week
Sizeable number of potential homebuyers need to dispose their existing properties before entering the market either due to home purchase quotas or to raise cash for down payment
Home prices generally held up well, with polarization within the city where projects in core districts continue to be sought after by upgraders
Which company will benefit from resilient demand in core districts?
Click here to read our views
Mapletree Logistics Trust (MLT SP)
Citadel of Stability
DPU of 4.539 Scts (+0.5%), tracking ahead of estimates
Operations remain resilient; reversions dipped to +0.5% due to China negative rental reversions of -8.6%
Why we continue to like this stock despite headwinds in China?
Click here to read our views
WH Group Ltd (288 HK)
3Q23 results largely in line with expectations
3Q23 results were largely in line, with operating profit/attributable profit down 6%/13% y-o-y to US$408m/US$186m, mainly dragged down by US hog farming business
Discussion on the potential spin-off of Smithfield is ongoing; full disposal of upstream hog farming in the US will also be considered
What other catalysts do we see for the company?
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: Wednesday, October 25, 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: Retail Market Monitor: Wednesday, October 25, 2023
Click on the link for details.
UOBKH: Regional Morning Meeting Notes: Wednesday, October 25, 2023 [603305 CH, 763 HK, ID Telecommunications, GTB MK, CIMB MK, PEP MK, FR SP, SCGP TB, CENTEL TB]
Click on the link for details.
KGI
Top Stories, 25 Oct 2023
1. Asia markets mixed ahead of Australia’s inflation figures
2. SGX FTSE China A50 Index Futures is the world’s only USD-denominated futures offering investors an efficient way to access the China A-share market.
Find out more: https://www.kgieworld.sg/futures/sgx-a50
3. China govt land sales revenue drops in September, drags on recovery
4. Stocks rise amid earnings deluge: Stock market news today
5. Oil drops for third straight session on weak European economic data
6. USD/JPY remains trapped near 150.00 as investors dare BoJ to intervene
TRADING IDEAS: 🇸🇬 SINGAPORE
25 October 2023
🏙 Geo Energy Resources Limited (GERL SP): Profit off from seasonality
BUY Entry 0.260 – Target – 0.305 Stop Loss – 0.240
🏢 DBS Group Holdings Ltd (DBS SP): SGD strengthens again
RE-ITERATE BUY Entry 33.10 – Target – 34.50 Stop Loss –32.35
➡️ Read More: https://www.kgieworld.sg/research/oct25sg23
Technical Analysis: 25 October 2023
🇸🇬 SG
Singtel Ltd. (ST SP)
Frencken Group Ltd. (FRKN SP)
🇭🇰 HK
China Traditional Chinese Medicine Holdings Co Ltd (570 HK)
China Hongqiao Group Ltd (1378 HK)
Read More: https://www.kgieworld.sg/research/oct25ta23
CIMB
CHN: Strategy Note - China approves Rmb1tr sovereign bond
MAL: CGS-CIMB Daybreak - 25 October 2023
ASEAN: CGS-CIMB ASEAN Daily - 25 October 2023
Equity Research Reports.... ▌ TARGET PRICE CHANGES
THB: AP (Thailand) (ADD, tp:THB13.60▼) (HC) - Strong rebound likely in 4Q23F (24/10)
THB: SCG Packaging (REDUCE, tp:THB34.00▼) - 3Q23 EPS dragged down by fibrous its business (24/10)
▌ ECONOMIC & STRATEGY NOTES
THB: Economic Update - Greenlight ahead for Thai exports (24/10)
▌ SECTOR & COMPANY NOTES
MAL: YTL Power International (ADD, tp:MYR2.40) - S’pore to revamp gas procurement framework (24/10)
▌ 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 - 25 October 2023
Equity Research Reports.... ▌ TARGET PRICE CHANGES...
CHN: Ping An Bank (ADD, tp:CNY13.10▼) - Unexpected fall in 3Q23 net profit (25/10)
THB: AP (Thailand) (ADD, tp:THB13.60▼) (HC) - Strong rebound likely in 4Q23F (24/10)
THB: SCG Packaging (REDUCE, tp:THB34.00▼) - 3Q23 EPS dragged down by fibrous its business (24/10)
▌ STRATEGY & ECONOMIC NOTES...
THB: Economic Update - Greenlight ahead for Thai exports (24/10)
▌ SECTOR & COMPANY NOTES...
CHN: Kweichow Moutai (ADD, tp:CNY2,266.00) - Continuing to deliver steady sales growth (24/10)
CHN: Proya Cosmetics (ADD, tp:CNY165.00) - Good preparation for the Double 11 festival (25/10)
HKG: Yihai (ADD, tp:HKD29.70) - 3rd-party sales back to positive yoy growth in 3Q23F (24/10)
KR: Semiconductor (OVERWEIGHT) - Nvidia restrictions – potential impact on Korea memory names (25/10)
MAL: YTL Power International (ADD, tp:MYR2.40) - S’pore to revamp gas procurement framework (24/10)
▌ 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)
Trendspotter of the day (SIN/HKG/MAL): 25th October 2023
Please refer to below for the technical charts of the day.
SIN
Bear trap at key support level
HKG
Bullish continuation likely
Bullish trend to continue
MAL
Short-term uptrend?
Triangle breakout
CGS-CIMB SG/Msia Preview 25 Oct
SINGAPORE
DOW +205pts (+0.6%) NDQ +122pts (+0.9%) SPX +31pts (+0.7%) WTI (-2.1%) GOLD (+0.1%)
US equities finished higher led by as investors focus on earning reports. MSFT beats while GOOG misses results expectations, while GM (-2.26%) pulled its full year outlook amid rising costs due to United Auto workers union strikes. Earnings season started strong with 77% of companies reported earnings have posted earnings exceeding analysts’ expectations. Oil prices fell for the third straight session after a slow economic data from Germany, the euro zone and Britain weighed on the outlook for energy demand. US 10Yr yield remained steady at 4.82%.
CGS CIMB HIGHLIGHTS
* Mapletree Log Tr (MLT SP) reported 2QFY24 DPU of 2.268 Scts, +0.9% yoy, underpinned by higher contributions from existing assets, income from recent acquisitions and divestment gains, partly offset by weaker China performance and income vacuum from properties under redevelopment and weaker forex. 2Q revenue +1.5% yoy to S$186.7m while NPI +1.2% yoy to S$162m. MLT has delivered S$900m of acquisitions and S$150m of divestments in 1H24 and has S$370m of ongoing AEIs. Add, TP: S$1.88
* Frasers Centrepoint (FCT SP) DPU of 12.15 Scts (-0.6% yoy) was in line at 99.9% of our FY23F. FY23 revenue and NPI grew 3.6%/2.7% yoy to S$369.7m/S$265.6m. Portfolio occupancy robust at 99.7% (excl. Tampines 1 which is undergoing AEI), up 1.0/2.2ppts qoq/yoy. FY23 reversions was positive at 4.7% (FY22: 4.2%). 3QCY3 tenant sales (+7.3% yoy) at 118% of 3QCY19 levels. Occupancy cost of 15.6% is tracking below FY18/19 levels, indicated that tenants are trading at healthy levels and room for more rental growth. Portfolio valuation (+0.6% yoy) and cap rates were stable yoy. Add, TP: S$2.59
* Far East Hospitality Tr (FEHT SP) 3Q/9M23 NPI of S$28.1m/S$77.1m grew 42.4%/34.8% yoy beat, forming 30.6/83.8% of our FY23F. 3Q23 hotel RevPAR (+43.6% yoy) surpassed 2019 levels (105.6%) for the first time since the pandemic. One hotels remains on government contract. 3Q23 SR RevPAR of S$239 (+12.2% yoy) at 131.3% of 3Q19 levels. Slight 1.7ppt yoy decline in occupancy rates offset by higher room rates. The management announced that they will be paying out part of the S$18m received in March 2023 from the divestment of Central Square to cushion the impact from higher interest rates. Add, TP: S$0.77
OTHER NEWS
* Sembcorp Ind (SCI SP) Sembcorp Utilities Pte Ltd, and Indonesian state- owned utility company PT PLN (Persero) have signed a joint development study agreement to explore the feasibility of green hydrogen production in Indonesia for export to Singapore. Facility could potentially produce up to 100,000 tonnes of green hydrogen per annum in Indonesia using locally sourced renewable energy, which will be exported via subsea pipeline to Singapore.
* Grand Banks Yachts (GBY SP) reported NPAT of $2.8M for the 1QFY2024 ended Sept 30, 158% higher than its NPAT of $1.1 M during the same period last year, attributable to the higher revenue for the group ramped up boat-building activities at its manufacturing yard in Pasir Gudang, Malaysia.
* Trans-China Auto (TCAH SP) proposed to change auditor from PwC to Deloitte
* Pacific Radiance (PACRA SP) proposed change of auditors from EY to PKF LLP citing part of good corporate governance initiatives and cost efficiencies
MALAYSIA
Asian stocks had a mixed day due to changes in Treasury yields. The local benchmark FBMKLCI (KLCI) dropped 0.17% to close at 1,435.65, with some sectors rebounding and others lagging. The index showed signs of consolidation within the 1,430-1,438 range, and a move below 1,430 could indicate a deeper consolidation with support at 1,412. A potential breakout targets 1,450, and a strong one might test 1,460-1,465 levels. 🛢️ OIL 🛢️ Oil price close lower amid signs supply tightness has slackened and the Israel-Hamas war will remain contained for the time being. WTI: 83.74 (-2.05%) Brent: 88.07 (-1.96%) 🌾 PLANTATIONS 🌾 Palm oil fell for a second day on expectations for increased supplies in MY and weaker soybean oil prices. 3rd MONTH FCPO: 3,667.00 (-2.29%) 🔴CGS-CIMB Highlights *YTL Power International (YTLP MK) - S’pore to revamp gas procurement framework (Maintain Add with a TP of RM2.40) https://bit.ly/3FtzhWT 📰💼 COMPANY NEWS 💼📰 *AirAsia X Bhd (AAX MK) achieved a passenger load factor of 80% for the third quarter of 2023 (3Q2023), up 7% year-on-year (y-o-y) while seat capacity surged over nine times, hitting 1.01 million seats flown. *Duopharma Biotech Bhd (DBB MK) has secured another six-month contract extension for the new approved products list (APPL) to supply pharmaceutical and non-pharmaceutical products to government hospitals and clinics. *Atrium Real Estate Investment Trust's (ATRM MK) net profit for the third quarter ended Sept 30, 2023 (3QFY2023) fell 4.1% y-o-y on higher expenses owing to an increase in finance costs amid the elevated interest rate environment.
Lim&Tan
MayBank
HK: DIM SUM DAILY
MY: TRADERS’ ALMANAC ID: INDONESIA PROPERT
CIMB Group Holdings (CIMB MK)
Kasikornbank (KBANK TB)
Jollibee Foods (JFC PM) Frontken Corp. Bhd (FRCB MK) Siam Global House (GLOBAL TB)
MAYBANK SECURITIES - EM Asia Headlines 251023
Indonesia
Finance Ministry gears up to stabilize rupiah amid dollar pressures Jokowi to Reshuflle Cabinet This Week
Malaysia
Philippines
Singapore
Thailand
Business travel on road to recovery Banks post 9-month loan growth of 0.71% Petrol price cut next week Srettha defends economic stimulus measures Vietnam
China
India
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