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Author: traderhub8   |   Latest post: Fri, 8 Nov 2019, 4:10 PM

 

Phillip Capital Morning Note - 2/4/2019

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Oil rises to 2019 highs as demand outlook improves. Oil climbed about 2 per cent to new 2019 highs on Monday, with Brent crude touching US$69 a barrel, after positive signs for the global economy and tighter supplies drove both benchmarks' largest firstquarter gains in nearly a decade. Brent crude ended the session up US$1.43, or 2.1 per cent, at US$69.01 a barrel after rising to US$69.19, its highest since November. The global benchmark rose 27 per cent in the January-March period. US West Texas Intermediate (WTI) futures settled up US$1.45, or 2.4 per cent, at US$61.59 per barrel, after reaching their highest in nearly five months at US$61.72. WTI gained 32 per cent in the first quarter.

Keppel O&M announces novation of contract from BOTL to Borr Drilling. The agreement is to replace the construction contract of the jackup rig currently being built by Keppel Fels for BOTL, to Borr Drilling. Under the deal terms, Borr Drilling will take over the contract of the jackup rig from BOTL, which has already paid Keppel FELS in full for the rig, except for the portion of extension costs to be due at delivery. Based on the construction contract, the delivery schedule of the rig remains as January 2020.

Keppel acquires stake in electric vehicle battery businesses for US$50m. Envision AESC Group recently acquired Automotive Energy Supply Corporation (AESC), a former venture between Nissan Motor Company (Nissan) and the NEC Group. It has also acquired the entire share capital of NEC Energy Devices, a battery electrode manufacturing company owned by NEC Corporation. Envision AESC and Nissan hold about 80 per cent and 20 per cent of the shares of the newly established Japanese holding company, Envision AESC Group, respectively.

SIA Engineering Company signs S$1.4b services agreement with SIA. The new agreement, commencing Apr 1, 2019, is for a term of two years, with an option to renew for a further period of two years. SIAEC's support of the SIA fleet covers a broad spectrum of maintenance, repair and overhaul and fleet management support services. The agreement, if renewed after the first two years, is expected to yield a labour revenue of S$1.3 billion to S$1.4 billion over the four-year term.

KPMG questions KS Energy's ability to continue as a going concern. It noted in its independent auditors' report that it has taken into account that the group incurred a net loss of S$53.9 million for FY2018 and, as at end-2018, the group's and company's current liabilities exceeded current assets by S$18.3 million and S$2.5 million respectively. The group and company also had deficits in shareholders' equity of S$10.3 million (excluding non-controlling interests) and S$11.7 million respectively.

Olam secures world's first digital loan of US$350m. The food and agri-business company said this is the world's first "digital loan" – where the pricing of the facility is linked to Olam's "digital maturity score", thereby supporting Olam in its ongoing efforts towards digital transformation. The digital maturity score is determined by the Boston Consulting Group using its proprietary "Digital Acceleration Index" methodology which assesses Olam across four criteria, namely: (a) business strategy driven by digital, (b) digitising the core, (c) new digital growth and (d) enablers.

Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, The Business Times, PSR

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