Singapore Market August 2020 Wrap Up - CGS-CIMB Research 2020-08-31: Singapore In 5

WILMAR INTERNATIONAL LIMITED (SGX:F34)

Singapore Market August 2020 Wrap Up - Singapore In 5

The FSSTI closed Aug flat at 2,532.51 pts, up by a marginal 2.7 pts m-o-m, amid grim economic data and poor visibility regarding the COVID-19 outbreak.
The government committed an additional S$8bn for job retention and creation, extending the wage subsidy (JSS) for another seven months till Mar 2021.
2Q20 GDP contracted 13.2% y-o-y, below our and consensus forecasts, due to weaker manufacturing (-0.7% y-o-y) and construction (- 59.3% y-o-y) activities. The circuit breaker exacted a heavy toll on transport (-39.4% y-o-y), retail trade and business services (-13.4%), while concerns over job security weighed on consumption (private consumption: -28.8% y-o-y).
NODX rose 6% y-o-y in Jul 20, above consensus expectations of 4.2% y-o-y; however, volume of total trade fell 8.9% y-o-y, as total exports and imports fell. Non-electronics exports increased 6.9% as pharma offset the fall in petrochem demand.
1H20 private home prices (URA data) fell 0.6%; dragged by declines in the Outside Central Region (-2.2%) and Rest of Central Region (-0.3%), while the Core Central Region managed a small 0.4% increase. Primary home sales for Jul 20 were 8.2% higher m-o-m, but down 8.4% y-o-y, with 1,142 units sold.
- Property Development & Inventory - CGS-CIMB Research 2020-08-17: Primary Home Sales Continue To Hold Up.

Tech, utilities and consumer services were the top performing sectors for Aug, while oil & gas (falling global demand), telcos and healthcare underperformed.
The top index performers for Aug were Venture Corp (SGX:V03) (strong results), while SATS (SGX:S58) and ComfortDelGro (SGX:C52) rebounded as ‘the worst is believed to be over’, while Keppel Corp (SGX:BN4) (Temasek bid scrapped), SingTel (SGX:Z74) (poor results) and Mapletree Industrial Trust (SGX:ME8U) (sale of prime assets) brought up the rear.
In the mid-large-cap space, Medtecs International (SGX:546) (strong results), Zheneng Jinjiang (SGX:BWM) and Mandarin Oriental (SGX:M04) were the best performers, while the worst performers were Keppel Corp (SGX:BN4), Golden Agri Resources (SGX:E5H) (poor results, despite rising CPO prices), and Sinarmas Land (SGX:A26).
Institutional investors continued with their broad-based selling and accumulation in tech; with industrials, consumer and telcos most heavily sold down. Retail participation in the market remained strong with the biggest inflows into financial services, industrials and telcos. See -
- SGX Market Fund Flow Overview.
- SGX Weekly Fund Flow By Sector.
Aug’s earnings releases continued on Jul’s dour note, with earnings disappointments overshadowing surprises by a ratio of 3:1. For full results wrap-up, see Singapore Strategy - CGS-CIMB Research 2020-08-18: Life Support Mode But Incremental Positive.

Wilmar (SGX:F34)’s China unit, Yihai Kerry Arawana, gets approval from Shenzhen’s ChiNext Board’s listing committee.
Tuan Sing (SGX:T24) is divesting Robinson Point for S$500 million.
Teckwah Industrial Corp (SGX:561)’s biggest shareholders make voluntary cash offer of S$0.65 to take it private.
GENHK (delisted from SGX) suspends all payments to creditors.
CapitaLand Mall Trust (SGX:C38U) is listing up to 2.78b new units, CapitaLand Commercial Trust (SGX:C61U) is set to delist.

The FSSTI traded pretty much flat in Aug, leaving the ongoing long-term downtrend in control. As mentioned previously in Jul, the bearish break below the uptrend line or neckline (orange highlight, see chart in PDF report attached below) has validated the head and shoulders pattern, signaling further downside. Further signs of weakness were highlighted by the bearish rejection near the 20- and 60-day moving average in Aug, effectively forming new lower high (LH) points. Therefore, with the downtrend still intact and the bearish momentum gaining strength, there is a high likelihood of seeing a break below the 2,500 support in the coming weeks.
More importantly, a break below the 2,500 support would likely kickstart the next wave of sell-offs, with the bears targeting the 2,300-2,400 support area.
As for the upside, the 2,600 resistance area will likely act as the ceiling in the near term.

LIM Siew Khee CGS-CIMB Research | Jeremy NG Choon Heng CGS-CIMB Research | https://www.cgs-cimb.com 2020-08-31

SGX Stock Analyst Report ADD MAINTAIN ADD 5.530 SAME 5.530