Daily BriefsSingapore

Brief Singapore: Singapore Press Reach for 1.18 and more

In this briefing:

  1. Singapore Press Reach for 1.18
  2. The Week That Was in [email protected] – Asian Hospitals, Noodles, and SingTel
  3. Singapore STI Laggard Play

1. Singapore Press Reach for 1.18

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Singapore Press Holdings (SPH SP) remains in a macro downtrend with recent sell pressure stemming from risk of de listing which comes to a head on June 4, 2020.

A well entrenched downtrend remains intact.

Sell volume has picked up after breaking below 1.45 support (now fresh resistance).

1.60 price and trend resistance marks the intermediate barrier to clear to turn the bias from bearish to neutral. 

Immediate downside projections come in at 1.18 and 1.03 with the later the de list announcement target. Staying in the STI would induce a rise back to 1.45 and then the more challenging 1.60 level.

MACD bear turn and pocket support stands out.

2. The Week That Was in [email protected] – Asian Hospitals, Noodles, and SingTel

This past week’s offering of Insights across [email protected] is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights.

Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week’s relevant discussions in [email protected]

Macro Insights 

In Emerging Markets: Next Year’s Trade…again?,Paul Hollingworth revisits emerging markets as an asset class and asks whether it is time to play this much-touted theme. 

In Sri Lanka: Struggling to Avert Being The “Next Argentina” Amid Unsustainable Debt, Cross ASEAN Chief Economist Prasenjit K. Basu revisits Sri Lanka, where he sees choppy waters ahead for the economy. 

Equity Bottom-Up Insights

In Indofood CBP Sukses (ICBP IJ) – US$3bn Acquisition Creates the Emerging Market Noodle King, CrossASEAN Insight Provider Angus Mackintosh zeros in on Indonesia’s leading local staples player post the recent announcement of a mega acquisition.

In Indofood CBP (ICBP IJ): US$ 3Bn Acqsn. Of Affiliate – Dizzy Valuation, Earnings Dilution,Devi Subhakesan also looks at this large acquisition by Indofood CBP Sukses (ICBP IJ) and takes a more cautious view. 

In SingTel: All-Time Low Implied Stub; Inexpensive Proxy Into Bharti,David Blennerhassett comments on Singtel (ST SP)s recent results and comes away positive on the company inexpensive valuation and a cheap way to get exposure into Bharti Airtel (BHARTI IN)

In Singapore Air – Aftermath of the Rights, events specialist Travis Lundy revisits this giant slow-motion block trade of Singapore Airlines (SIA SP) rights. 

In Bangkok Chain Hospital: When the Going Gets Tough, our Thia Guru Athaporn Arayasantiparb, CFA reports back after visiting Bangkok Chain Hospital (BCH TB) and Thai British Security Print (TBSP TB).

In RATCH: 2Q20 Earnings to Grow from IPP Seasonality, our friends at Country Group revisit this Thai power utility player. 

In EGCO: 2Q20 Earnings to Be Pressured by Lower Overseas Contribution, Country Group circle back to Electricity Generating (EGCO TB) post its recent analyst briefing. 

In PRM: Revising up Charter Rate for Floating Storage by 25% in 2Q20,Country Group take a look at Prima Marine PCL (PRM TB) after a recent conference call with the company. 

Sector and Thematic Insights

In this Smartkarma Originals Insight, Asian Hospitals – In Through The Out Door,Angus Mackintosh takes a look across the Asian Hospitals and Diagnostics space and finds a mixed picture but with a number of interesting opportunities opening up.

What’s Original?  In this Smartkarma Originals Insight, he covers 15 healthcare stocks in total including 11 listed hospitals and four listed diagnostics companies. Researching this Insight has involved multiple conversations with industry experts, as well as company management, which has enabled him to come up with his views. He sees opportunity in these COVID-19 times of adversity to pick-up some very well-managed companies at depressed valuations and hence the title of the Insight.” In Through the Out Door”. 

In Trade-Ideas for Singapore REITs – Coming Back to Life,Sumeet Singh revisits the Singapore REIT space and find opportunity. 

In Singapore REITs – REITs Will Have to Fund Some SME Rents, by Law,Sumeet Singh revisiTS THE Singapore REITs sector after the recent government declaration that landlords must provide some support and rental waivers for SME tenants. 

In STI Rebalance Preview – A Spare Space,Brian Freitas examines the potential impact of the FTSE Straits Times Index (STI) (STI INDEX) rebalancing. 

In KLCI Rebalance Preview – Telekom Expecting a Call,Brian Freitas looks for the impact on the upcoming Kuala Lumpur Composite Index (Klci) (FBMKLCI INDEX) rebalancing and sees potentially positive repercussions for Telekom Malaysia (T MK).

In GUNKUL: 1H20 Earnings to Grow from 94MW New Power Plant COD,Country Group revisit this IPP post a meeting with management.

Credit Insights

In United Overseas Bank: Go Underweight AT1,Hank Calenti, CFA revisits United Overseas Bank (UOB SP) and finds a relatively gloomy picture for its bonds. 

 In Oxley Holdings Ltd. – Potential Refinancing Requirements in 2021, credit specialist Lakshmi Iyer, CFA zooms in on this Singapore property player, where there have been some concerns on its debt.

In Indika Energy – Earnings Flash – Q1 FY 2020 Results,Trung Nguyen circles back to this Indonesian coal player post recent numbers. 

In Tunas Baru – Tear Sheet,Leonard Law, CFA takes a holistic view on Indonesian coal player Tunas Baru Lampung (TBLA IJ). 

3. Singapore STI Laggard Play

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FTSE Straits Times Index (STI) (STI INDEX) has been a great underperform short compared to stronger horses in Asia but is at a point of an inflection if risk continues higher, the STI will try to rally to 2,700 resistance.

RSI bull wedge and price flat range stand out as bullish if we do not see a bear impulse below 2,500.

Given our risk on bet for the SPX to reach for 3,100, and core Asia trading near range highs, Singapore becomes an attractive laggard upside play that has trailed the region. There is a limited window for a rally to unfold per our cycle dates.

A rise at this stage would be tactical with a bearish macro stance barring a clear break above 2,720/50.

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