WHAT HAPPENED LAST NIGHT
US stocks were mixed after the close on Wednesday, as gains in the utilities, materials and technology sectors led shares higher and losses in the financials and energy sectors led shares lower. At the close of the NYSE, the DJIA remained unchanged while the S&P 500 index was up 0.30%, and the NASDAQ Composite index advanced 0.73%. Advancing stocks outnumbered falling ones on the NYSE by 2,023 to 1,239 and 164 ended unchanged; on the Nasdaq Stock Exchange, 2,605 advanced and 1,868 declined, while 232 ended unchanged. (Source: WSJ, CNBC).
CapitaLand Integrated Commercial Trust – Bumpy recovery but reopening likely to resume.
(CICT SP/BUY/S$2.11/Target: S$2.40)
CICT weathered a bumpy recovery as Phase 2 (Heightened Alert) was followed by a new wave of Delta variant infections. Downtown malls continued to incur negative rental reversions. For the office portfolio, AST2, CapitaGreen and Capital Tower are expected to see transitory vacancies. Nevertheless, CICT benefits
from reopening due to its diversified exposure to retail and office. 2022 distribution yield of 5.5% is attractive given its scale and diversification. Maintain BUY. Target price: S$2.40…
Frencken Group – Structural growth story intact: Maintain BUY.
(FRKN SP/BUY/S$2.09/Target: S$2.62)
High-tech component manufacturer Frencken is a longer-term beneficiary of positive trends in the technology sector. With a diverse blue-chip clientele, its earnings should be more stable than its peers’ amid the ongoing disruptions brought about by the COVID-19 pandemic, which has impacted manufacturing plants worldwide. Frencken’s EPS is expected to grow at a 24% CAGR over 2020-23.
Maintain BUY and target price of S$2.62…
Koufu Group – Well-positioned for recovery from further reopening.
(KOUFU SP/BUY/S$0.66/Target: S$0.77)
Business in Singapore is expected to improve with easing restrictions and further reopening of its borders. This comes as a higher percentage of its population is vaccinated. Visitors to malls and casinos should increase gradually, while those to heartland areas should remain resilient. Koufu is in a good position to emerge stronger against its competitors post-pandemic, given its good expansion strategy and strong balance sheet. Maintain BUY and target price of S$0.77 (17x 2022F PE)…
Singapore Technical Analysis:
Singapore Telecommunications (ST SP) – Trading BUY
The price managed to stay above the base line, which is acting as support at the moment. There is still a bullish conversion and base line crossover that hint at potential upside ahead…
Oversea-Chinese Banking Corp (OCBC SP) – Trading BUY
The price broke and closed above its recent resistance high with a bullish candle yesterday. Both Bollinger bands are widening, suggesting increased volatility ahead…