SINGAPORE PRESS HLDGS LTD (SGX:T39)
Singapore Market June 2020 Wrap Up - Singapore In 5
- FSSTI closes Jun at 2,589.91 pts, up 3.15% m-o-m. Singapore reemerges from the circuit breaker.
- Singapore general elections on 10 Jul.
- FSSTI: Mapletree Industrial Trust (SGX:ME8U) has replaced SPH (SGX:T39).
- We keep our FSSTI target at 2,495 (12x CY21F P/E).
- Current top picks:
Tentative steps towards a ‘new normal’
- The FSSTI closed Jun at 2,589.91 pts, up 79.16 pts m-o-m (3.15%) as Singapore lifted the circuit breaker from 1 Jun (Phase1), and further loosened movement restrictions (Phase2) as of 19 Jun.
- Economic data is finally showing the impact of Covid-19 on the economy, as Singapore’s Apr 20 NODX fell by 4.5% y-o-y, and non-electronic exports fell 8.8% y-o-y. The biggest falls came from petrochem, food preparations and non-electric engines, while the strong electronics performance, underpinned by increased demand from work-at-home policies, dampened the decline somewhat. Biomed, a strong performer in recent months, dropped 7% y-o-y due to a high base year.
- FY20 GDP forecast is expected to fall by 5.8% (CGS-CIMB: -4.9%), according to the latest consensus survey by the Monetary Authority of Singapore (MAS).
- Based on Urban Redevelopment Agency (URA) data, May 20 home sales were up 75% m-o-m despite Singapore still being under the 'circuit breaker'. Increased demand was concentrated mainly in the periphery and suburban regions, as demand in the Core Central Region (CCR) fell 50% m-o-m.
General elections declared; FSSTI constituent member changes
- Singapore goes to the polls on 10 Jul, with the government seeking a new mandate. From past election results, there is likely to be little, if no impact, on the economy and the market.
- Apart from utilities which outperformed, other sectors traded range-bound.
- As of 22 Jun, Mapletree Industrial Trust (SGX:ME8U) has replaced SPH (SGX:T39) in the FSSTI index.
- See SGX market update: Mapletree Industrial Trust, The 6th REIT to Join STI on 22 June.
- The big gainers for the month were mostly deal-related;
- Perennial Real Estate Holdings (SGX:40S),
- Sembcorp Industries (SGX:U96),
- Yoma Strategic (SGX:Z59) (acquisition),
- Dairy Farm (SGX:D01) (disposal of TW asset),
- Hongkong Land (SGX:H78) (previously oversold).
- Index losers were
- Jardine Cycle & Carriage (SGX:C07) (ex-dividend),
- Mapletree Commercial Trust (SGX:N2IU) and
- CapitaLand Mall Trust (SGX:C38U) (additional aid to tenants, cautious retail outlook).
- Mid-large cap losers were:
- Sembcorp Marine (SGX:S51),
- Hutchison Port Holdings Trust (SGX:NS8U) (lower DPU, repayment of debt),
- Manulife US REIT (SGX:BTOU) (Covid situation in the US).
- Institutional sell-off/retail accumulation continued for the fifth consecutive month, with funds doing broad-based selling in all sectors, save for technology. Outflows were particularly heavy in Financials, REITs, and Telcos. The biggest inflows from retail investors were into Financials, Industrials, REITs and Telcos.
Key corporate news
- Offer to take Perennial Real Estate Holdings (SGX:40S) private at S$0.95 a share, from consortium led by firm's CEO.
- Sembcorp Marine (SGX:S51) to raise S$2.1bn via 5-for-1 renounceable rights issue, and subsequently to demerge from parent Sembcorp Industries (SGX:U96) by distribution in specie (427-491 Sembcorp Marine shares for every 100 Sembcorp Industries shares owned).
Technical perspective
- As the FSSTI tested a key resistance level at 2,840 points, the 61.8% Fibonacci retracement level, the sharp sell-off that followed since 9 Jun suggests that the long-term trend remains bearish. The index has fallen back below the 20 and 60 day moving average since 19 Jun, showing further signs of weakness.
- Moreover, the break below the uptrend line in the last week of Jun further highlights the growing bearish momentum. Therefore, we expect the current bearish momentum to sustain as the FSSTI likely drifts lower to the 2,500 support area. In the event that FSSTI breaks below the 2,500 key psychological level, there would likely be an acceleration in the bearish momentum with a downside target of 2,300 support.
- On the upside, the key resistance overhead near 2,670-2,720 would likely remain as the ceiling.
- See STI chart in PDF report attached below.
LIM Siew Khee
CGS-CIMB Research
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https://www.cgs-cimb.com
2020-06-30
SGX Stock
Analyst Report
1.570
SAME
1.570