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Author: traderhub8   |   Latest post: Thu, 27 Feb 2020, 2:57 PM

 

Phillip Capital Morning Note

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PSR brief comment on Budget 2019: Ongoing effort by the government to restructure the economy as our working population ages and deepen the capabilities businesses and workforce. More funds set aside to build an ecosystem for start-ups to flourish and scale. New initiatives launched such as Scale-up SG programme, Innovation Agents programme and SME Co-Investment Fund III.There is minimal near-term impact on the stocks under our coverage. However, sectors most affected include:

1. Healthcare sector will benefit the most as there will be more allocation of funds for the medical needs of the elderly plus higher insurance coverage. The S$8bn Merdeka package is mainly in the form of "medical bills" such as Medisave top-ups, CHAS subsidies, MediShield Life premium subsidy and incentive to join the new CareShield Life. Non-Merdeka package will be S$3.1bn for CareShield Life subsidies and ElderFund.

2. The dependency ratio for the services industry will be lowered 5% points to 35% by 2021. This is to reduce reliance on foreign worker. Most impacted will be restaurants, hotels and supermarkets.

3. Construction and marine sector no change to their dependency ratio ceiling.

4. Higher spending on defence will be supportive for ST Engineering. Defence expenditure will rise 5% to S$15.5bn.

5. Supermarkets will benefit marginally from lower duty-free allowance and lower value of goods granted GST relief for travellers outside Singapore.

6. Consumer sector, in general, will get some boost from the S$1.1bn Bicentennial Bonus via $300 GST Voucher, $100 Workfare Income Bonus, $200 personal income tax rebate and $150 Edusave top-up.

7. No changes to the planned GST rise from 7% to 9% from 2021 to 2025.

Singapore unveiled its 2019 budget on Monday, announcing – among other items – a S$1.1bn Bicentennial Bonus, a doubling of diesel tax and lower GST import relief for some travellers, tighter restrictions on foreign workers, a boost in spending on health care for its aging population and a tax rebate for some citizens ahead of an election that could come as early as this year.

DBS Group Holdings reported a 10 per cent increase in net profit after one-off items to $1.32 billion for the fourth quarter, up from $1.19 billion the year before. While business momentum remained healthy with "sustained loan growth and net interest margin progression", results were "dampened" by weakness in treasury markets income.

SoftBank has provided half the money for a $400 million fund that will allow Abu Dhabi's state investment firm to invest in European start-ups.

Best World International requested a halt in the trading of its shares with immediate effect on Monday morning at 11.23am, pending an announcement.

IX Biopharma has entered into an agreement with independent third party Eurofins Australia New Zealand Holding for the proposed disposal of its entire stake in its wholly owned subsidiary, Chemical Analysis, for A$12.5 million (S$12 million) in cash.

Frasers Property has entered into an agreement to acquire a 17.8 per cent stake in PGIM Real Estate Asia Retail Fund Ltd (PGIM Real Estate) for S$356.4 million - subject to determination of the dividend amount payable in respect of the sale shares for Q4 2018.

KOH Teck Chuan, formerly chief executive at Hongkong Land subsidiary MCL Land, has been appointed chief executive of Frasers Hospitality, effective Feb 19.

Source: The Business Times

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