WHAT HAPPENED LAST NIGHT
US stocks were higher after the close on Wednesday, as gains in the energy, financials
and technology sectors led shares higher. At the close of the NYSE, the DJIA rose 1.00%
while the S&P 500 index gained 0.95%, and the NASDAQ Composite index advanced
1.02%. Advancing stocks outnumbered falling ones on the NYSE by 2,679 to 673 and 101
ended unchanged; on the Nasdaq Stock Exchange, 3,128 advanced and 1,310 declined,
while 177 ended unchanged. (Source: WSJ, CNBC).
Singapore Company Update:
StarHub – A fair deal – Starhub purchased controlling stake in MyRepublic broadband business at 8x EV/EBITDA.
(STH SP/HOLD/S$1.23/Target: S$1.30)
StarHub is acquiring a 50.1% stake in MyRepublic Singapore broadband business for S$70.8m. There is also a S$105m bridging loan to be superseded by a S$74.2m working capital loan. The transaction is priced at 8x EV/EBITDA, which we deem as fair given its controlling stake. There is a 3% earnings enhancement upon completion of the deal. Overall, the deal is fair as StarHub aims to drive its broadband market share to 40% with the acquisition. We re-iterate our HOLD call and DCF-based target price of S$1.30…
HK/ China Company Update:
Property – Developers expected to help solve housing shortage.
Hong Kong developers’ share prices are under pressure after reports of Chinese officials asking them to use their resources and influence to back Beijing’s interests and solve the housing shortage. This puts the focus back on supply, in line with the property policies in Hong Kong since 2017. The developers’ farmland could be converted under PPP or resumed by the government. The vacancy tax could also be
reintroduced in the near-term. Maintain MARKET WEIGHT…
Singapore Technical Analysis:
Olam International (OLAM SP) – Trading BUY
Price broke out from flag pattern, which is one of the continuation patterns, yesterday with a bullish candle. The MACD is still strong and bullish and is moving higher…
Singapore Tech Engineering (STE SP) – Trading BUY
Price has stabilised at the bottom of S$3.74. It broke above the upper Bollinger band yesterday with a bullish candle. The RSI is rising above its neutral level as well…