March 2019 - CGS-CIMB Research 2019-04-01: Singapore In 5 Minutes

Singapore Strategy Note - CGS-CIMB Research | SGinvestors.io COMFORTDELGRO CORPORATION LTD (SGX:C52)

March 2019 - Singapore In 5 Minutes

Market flat m-o-m

  • The FSSTI closed flat m-o-m in Mar 2019 at 3,212.88 pts, as China’s economy showed signs of recovering while sentiment was also buoyed by the US Fed keeping its benchmark rate constant at 2.5%. Trade tensions between US-China, however, continue to weigh on investor sentiment.
  • Singapore industrial output rose 0.7% y-o-y in Feb on the back of gains in biomedical, and slower declines in the electronics and precision engineering sectors. Feb monthly property sales were higher m-o-m (4.4%) and y-o-y (18.5%), with the bulk of sales coming from launches in the non-central districts.

Institutions net sold; retail buyers, CD top gainer

Key corporate news: quality yield play in demand

  • Restructuring at HYFLUX LTD (SGX:600) hit another snag as ‘rescuer’ Salim-Medco issued a statement that it does not back Hyflux's proposed restructuring plans.
  • Unlike the woes surrounding Hyflux bonds, SINGAPORE AIRLINES LTD (SGX:C6L)’s 3.03% five-year bonds received overwhelming demand from both institutional and retail investors, leading to the issue being upsized to S$750m, from S$500m.
  • SINGAPORE TECH ENGINEERING LTD (ST Engineering, SGX:S63) made a €250m (S$383m) cash offer for Newtec Group NV, a Belgium-based satellite equipment maker, to expand its presence in the satcom sector. ST Engineering also announced that all anti-trust approvals have been obtained for its MRAS acquisition, now pending the usual clearance from the Committee on Foreign Investment in the US (CFIUS). Subject to this, the proposed acquisition will be closed in 2Q19, it said.

Technical perspective – one month outlook

  • FSSTI's recent failure to break above the 3,270 resistance level suggests that its long-term trend remains bearish. Key level to watch out next is the 3,153 support.
  • If the bears were to break below the 3,153 support area, we expect a sharper sell-off to begin with the bears targeting the 3,100 support level, followed by 3,000.

LIM Siew Khee CGS-CIMB Research | https://research.itradecimb.com/ 2019-04-01
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