28 Nov2023 Reports

Updated: Nov 29, 2023

SGX

Chips Fuel October Rebound in Singapore Manufacturing Growth

https://www.sgx.com/research-education/market-updates/20231127-chips-fuel-october-rebound-singapore-manufacturing

5 in 5 with GSS Energy - Navigating the Green Industry

https://x.edm.sgx.com/ats/msg.aspx?sg1=531ce90887989ae02ea41c35b6a20b7e%c2%a0

Phillip OCBC DBS UOB KGI CIMB Lim&Tan MayBank

https://www.zawya.com/en/mena

Phillip Capital Market Reports:

Stock Research

Phillip Daily Morning Note :

US Market (By Phillip Global Markets Night Desk)

28 November 2023

Oil Prices Down on Excess Supply

As we expected, the current price of a barrel of West Texas Intermediate (the crude oil benchmark grade) has fallen below the $80 level, down from a high near $94 in late September but up from the lows of $66 in March. We look for oil prices to stabilize at current levels for the next few quarters as the winter heating season approaches but global economic growth remains under pressure due to high interest rates. We now look for a barrel of West Texas Intermediate in 2023 to average $78, compared to last year's average price of $95. The year 2022 was volatile for the energy industry, as the price per barrel of oil ranged from $71 to $121. We don't look for as much volatility in 2024, and our preliminary forecast calls for WTI at $80 a barrel in a trading range of $95-$65 for the year. The core drivers behind oil prices in the long term are global demand and global supply. According to the U.S. Energy Information Administration, there was excess supply in 2022: global consumption was 99.4 million barrels per day, while global production was 100.1 million barrels. Forecasts for the next two years call for supply to modestly exceed demand. That likely will keep a lid on oil price spikes. Of course, there are always wild cards -- such as geopolitical developments (ranging from Russia's invasion of Ukraine, to sanctions in Iran and Venezuela, to turmoil in the Middle East). These wild cards can cause prices to fluctuate dramatically. That said, absent wild cards, the global demand-supply outlook suggests the days of triple-digit oil prices are in the rear-view mirror

Market Wrap

European stocks fell for a second day and US futures pointed to a weaker open on Wall Street amid signs the November rally in equities is overstretched.

The Stoxx 600 declined 0.7%, while contracts on the S&P 500 dropped 0.3%. LVMH led a retreat in European luxury stocks as HSBC Holdings Plc cut its price targets across the sector. Dutch biotech Argenx SE sank as much as 17% after preliminary results suggested its only medicine failed in a trial. Chinese e-commerce firm PDD Holdings Inc soared 17% in US premarket trading after posting earnings and revenue well above estimates.

Today's Big News

- Israel and Hamas Extend Truce and Blinken Heads Back to Mideast

- Billionaire Howard Pitches Abu Dhabi as Global Financial Hub (1)

- SenseTime Plummets After Short-Seller Targets Chinese AI Firm

- Oil Pares Gain as OPEC+ No Closer to Resolving Quota Dispute

- PDD Surges 14% After Hit App Temu Wrests Shoppers From Shein

- Musk’s Cybertruck Is Already a Production Nightmare for Tesla

OCBC

DBS

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MAS: Singapore companies, banks remain financially resilient even as borrowing costs rise
Chinese fast-fashion retailer Shein, last valued at US$66bn, has filed for IPO in the US
Buy Now, Pay Later services to hit record in the US on Cyber Monday according to Adobe Analytics

Regional Banking Sector

Buy dividend plays

Expect limited net interest income (NII) upside for regional banks, regardless of the interest rate environment
Credit costs set to normalise in FY24F while loan growth likely to remain sluggish for
SG/HK/US banks
CN/HK banks provide attractive dividend yields with negatives largely in price
Who are our top picks in the banking sector?
Click here to read our views

Singapore Stocks

4 stocks that benefit from falling household debt

The Financial Stability Review by MAS for 2023 revealed household debt fell to its lowest level in >10 years, as consumers cut back on housing loans amid high interest rates
Consumers spent more on outbound travel and domestic retail sales, which is positive for retail REITs and aviation/aerospace sector
We think this trend on preference for outbound travel/domestic retail sales spending over housing loans should continue in the foreseeable future
What are the stocks to watch?
Click here to read our views

China Water Affairs Group (855 HK)

1HFY3/24 net profit down c.14.9% y-o-y (below expectations)

Net profit fell 14.9% y-o-y on the back of Rmb depreciation and higher finance costs
Cut interim DPS by c.19% to HK$0.13, a negative surprise
Trading at c.3.8x FY24F P/E, near -2SD below its 7-year average of c.6.6x
Why we continue to like the company despite the earnings miss?
Click here to read our views