MARKET NEWS

US stocks were mixed after the close on Friday, as gains in the consumer discretionary, health and technology sectors led shares higher and losses in technology, communication services and consumer discretionary sectors led shares lower. At the close of the NYSE, the DJIA fell 0.02% while the S&P 500 index was up 0.30%, and the NASDAQ Composite index advanced 0.62%. Falling stocks outnumbered advancing ones on the NYSE by 1,735 to 1,547 and 143 ended unchanged; on the Nasdaq Stock Exchange, 2,255 advanced and 2,247 declined, while 212 ended unchanged. (Source: WSJ, CNBC)

During the last trading session, the FSSTI index fell 9.58pt to 3,188.50. Among the top active stocks were Singapore Telecommunications (+0.4%), Thai Beverage (+0.7%), Genting Singapore (-1.3%), SIA (-2.6%) and Rex International (+1.5%). The FTSE ST Mid Cap index was up 0.1% while the FTSE ST Small Cap Index fell 0.2%. The broader market saw 236 gainers and 240 losers with total trading value of S$964.1m.

WHAT’S IN THE PACK

Singapore Sector Update:

Banking – 3Q21 results preview: Resilient earnings. Stable asset quality.

We expect banks to report resilient earnings. We see a pick-up in loan growth partially offset by NIM compression. With asset quality stabilising, we expect DBS to benefit from write-back in general provisions and OCBC to see moderation in credit costs. We forecast DBS and OCBC to achieve net profit of S$1,622m (+25% yoy and -5% qoq) and S$1,163m (+13% yoy and flat qoq) respectively for 3Q21. DBS (Target: S$35.80) and BUY OCBC (Target: S$15.65). Maintain OVERWEIGHT…

Thai Beverage – Cheers to Thailand’s reopening.
(THBEV SP/BUY/S$0.705/Target: S$0.92)

Thailand’s government plans to reopen Thailand’s international borders to 10 countries in a bid to revitalise its battered tourism sector. Thailand’s authorities are also considering lifting Thailand’s ongoing alcohol ban in restaurants. With the arrival of vaccinated tourists, we think this would help boost alcohol consumption and volume in Thailand. In our view, this remains largely underappreciated by the market given ThaiBev’s attractive valuation. Maintain BUY with a target price of S$0.92…

HK/ China Economy Update:

Automobile – Weekly: PV sales rebounded 11% mom in the first half of October, in line.

China’s PV retail sales dropped 11% yoy but grew 11% mom in 1-17 Oct 21 on easing chip shortage. CPCA pointed out that the impacts of the resurgence of COVID-19 cases in certain cities and the property market woe are weighing on car sales. Looking forward, the chip shortage would probably ease from 4Q21, as TSMC said to allocate more capacity for the production of automotive chips. Maintain MARKET WEIGHT. Top picks: BYD, CATL, Zhongsheng and Yongda…

Singapore Technical Analysis:

Thai Beverage (THBEV SP) – Trading BUY

Price managed to remain above the resistance-turned-support level, coinciding with the conversion line support. There is still a bullish conversion and base line crossover that hint at potential upside ahead…

Hong Leong Asia (HLA SP) – Trading BUY

Price broke and closed above its recent high yesterday with a bullish candle. The middle Bollinger band, aka the 20-day moving average, is currently rising, suggesting the bullish trend…