Asian markets traded lower on Friday morning as there seems to be lack of progress in the high level trade talks in Beijing – causing rising expectations of delaying the 1st March tariff deadline.

The two countries’ leaders have yet to finalise meeting details, signalling that the time is not mature yet and conditions are not met for Xi and Trump to sit down and ink any meaningful trade deal.

On the positive side, a lengthened trade talk could serve to calm markets as it will buy time for China to press on structural reforms and carry out stimulus to counterbalance the impact of potential loss in exports. Whereas for US companies, extending tariff deadline will allow time to adapt to changes in a new trade environment while seeking for alternative supply chain solutions.

The US equities were under selling pressure yesterday as a much worse-than-expected December retail sales growth reading dampened risk sentiment. The US Retail Sales advance MoM growth came at -1.2%, falling short of consensus forecast of 0.1% growth and registered its worst reading since 2009. Fading consumer confidence in recent surveys and a collapse in retail sales growth flagged the risk of more downward pressure ahead.

China’s January trade activities smashed market expectation with strong rebound in both export and import activities. Although some attributed this strong move to frontloading activities ahead of the Lunar New Year holiday, but much higher-than-expected readings suggest the export is resilient, ruling out a collapse in trading activities due to trade war impact.

In Singapore, local banks earnings are likely to dominate STI’s movement next week. The three lenders – DBS, OCBC and UOB – are set to report record profits in 2018 on the back of higher Net Interest Margins (NIM), lower provisions linked to oil’s downturn and healthy loan growth. The future growth, however, will have to overcome a more challenging environment amid slowdown economic activities in the region, lower NIM growth due to Fed’s pause in rate hikes, and provision normalisation. DBS, OCBC and UOB are trading at average 11x P/E and 4.45% dividend yield. 

STI earnings calendar

Name

Date

Time

Period

Estimate

Domicile

DBS Group Holdings Ltd

18/02/2019

Bef-mkt

Y 18

2.218

SINGAPORE

CapitaLand Ltd

20/02/2019

Bef-mkt

Y 18

0.228

SINGAPORE

Sembcorp Industries Ltd

21/02/2019

Bef-mkt

Y 18

0.176

SINGAPORE

Singapore Technologies Enginee

21/02/2019

Bef-mkt

Y 18

0.174

SINGAPORE

Genting Singapore Ltd

21/02/2019

Aft-mkt

Y 18

0.065

SINGAPORE

Wilmar International Ltd

21/02/2019

Aft-mkt

Y 18

0.189

SINGAPORE

Oversea-Chinese Banking Corp

22/02/2019

Bef-mkt

Y 18

1.114

SINGAPORE

United Overseas Bank Ltd

22/02/2019

Bef-mkt

Y 18

2.404

SINGAPORE

Venture Corp Ltd

22/02/2019

Aft-mkt

Y 18

1.275

SINGAPORE

UOL Group Ltd

26/02/2019

 

Y 18

0.479

SINGAPORE

Golden Agri-Resources Ltd

27/02/2019

Bef-mkt

Y 18

0.004

SINGAPORE

Yangzijiang Shipbuilding Holdi

28/02/2019

 

Y 18

0.751

CHINA

Hongkong Land Holdings Ltd

28/02/2019

 

Y 18

0.43

HONG KONG

Jardine Matheson Holdings Ltd

28/02/2019

 

Y 18

4.574

HONG KONG

Jardine Strategic Holdings Ltd

28/02/2019

 

Y 18

3.12

HONG KONG

Jardine Cycle & Carriage Ltd

01/03/2019

 

Y 18

2.41

SINGAPORE

Dairy Farm International Holdi

01/03/2019

 

Y 18

0.367

HONG KONG

 

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