DAILY MORNING NOTE | 1 December 2023

**Do note that the last day of Morning Note Issuance will be on 14 December 2023. Morning Note will resume in January 2024**


Summary of Trades Initiated in Past Week

Factsheets


Singapore shares closed lower on Thursday (Nov 30), bucking gains in the region. Singapore stocks fell 0.4 per cent or 11.71 points to 3,072.99. Across the broader market, losers outnumbered gainers 300 to 280, after 1.4 billion securities worth S$1.9 billion changed hands. The Nikkei 225 rose 0.5 per cent, the Hang Seng Index gained 0.3 per cent, the Kospi Composite Index was up 0.6 per cent, while the FTSE Bursa Malaysia KLCI closed 0.5 per cent higher.

Wall Street indexes saw a mixed performance on the last day of November. The Dow Jones Industrial Average hit a new high for the year and finished up 1.5 per cent at 35,950.89, while the broad-based S&P 500 rose by 0.4 per cent to 4,567.80. The tech-rich Nasdaq Composite Index dropped 0.2 per cent to 14,226.22.

Top gainers & losers

Factsheets


EVENTS OF THE WEEK

Factsheets


SG

Starhill Global Reit has renewed its current master lease with Takashimaya manager Toshin Development Singapore due to expire in June 2025 for an initial term of 12 years. The Reit manager announced this in a bourse filing on Thursday (Nov 30). Beyond its expiry on Jun 7, 2037, the master lease may be further renewed by either party for an additional six years, and for a further three years thereafter, at the option of Toshin. Under the current master lease, Toshin is the master tenant occupying all the retail areas of the Ngee Ann City property owned by the real estate investment trust (Reit), except Level 5. The current lease contributed about 23.6 per cent of Starhill’s portfolio gross rent as at Sep 30, 2023.

Venture Corporation said on Thursday (Nov 30) that its board of directors has established a share buyback plan to purchase up to 10 million ordinary shares of the company. This plan was authorised by the board on Nov 29, following the approval of Venture’s shareholders of the share purchase mandate at the annual general meeting on Apr 27, the company said in a bourse filing. Under the mandate, the company can buy up to about 14.5 million shares, which translates to 5 per cent of the total number of issued shares of the company as at the date of the mandate. Shares of Venture lost 1.4 per cent, or S$0.18, on Thursday to close at S$12.53.

IHH Healthcare on Thursday (Nov 30) reported earnings of RM532.1 million (S$152.7 million) for the third fiscal quarter ended September, more than double the earnings of RM251.8 million in the corresponding year-ago period. For the nine-month period, IHH’s net profit was up 64 per cent year on year to RM2.2 billion, against RM1.4 billion. The stronger Q3 bottomline figures came in part on the back of a 27 per cent increase in revenue to RM5.8 billion from RM4.6 billion. The company said that it saw more patients, and benefited from higher revenue intensity across all its markets. There was also an improved case mix, the group added. Shares of IHH gained 0.6 per cent, or S$0.01, on Thursday to close at S$1.68.


US

Oil prices fell by more than 2 per cent on Thursday after Opec+ producers agreed to voluntary oil output cuts for the first quarter next year that fell short of market expectations. Brent crude futures for January settled 27 cents, or 0.3 per cent, lower to expire at US$82.83 a barrel, and a 5.2 per cent loss for the month. The February contract, which begins trading as the front month on Friday, fell US$2.00, or 2.4 per cent, to US$80.86. US West Texas Intermediate crude futures settled down US$1.90, or 2.4 per cent, to US$75.96, and down 6.2 per cent in November.

Inflation as measured by personal spending increased in line with expectations in October, possibly giving the Federal Reserve more incentive to hold rates steady and perhaps start cutting in 2024, according to a data release Thursday. The personal consumption expenditures price index, excluding food and energy prices, rose 0.2% for the month and 3.5% on a year-over-year basis, the Commerce Department reported. Both numbers aligned with the Dow Jones consensus and were down from respective readings of 0.3% and 3.7% in September. Headline inflation was flat on the month and at a 3% rate for the 12-month period, the release also showed. Energy prices fell 2.6% on the month, helping keep overall inflation in check, even as food prices increased 0.2%. Goods prices saw a 0.3% decrease while services rose 0.2%.

Shares of Ulta Beauty rose 10% in after-hours trading Thursday, as the company said its third-quarter sales rose while shoppers showed once again they’re willing to spend on fragrances, skin care and more even when the budget is tight. In the fiscal third quarter, net income rose to $249.5 million, or $5.07 per share, from $274.6 million, or $5.34 per share, in the year-ago period. Revenue increased from $2.34 billion in the year-ago period. Comparable sales, a metric that tracks Ulta stores open at least 14 months along with online sales, increased 4.5% year over year. Ulta Beauty expects net sales for the fiscal year to be between $11.10 billion and $11.15 billion, and comparable sales to range from 5.0% to 5.5%. It said adjusted earnings per share for the year will range from $25.20 to $25.60.

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


RESEARCH REPORTS

Semiconductor – Industry looks to have bottomed; optimistic outlook

Analyst: Jonathan Woo

– Total revenue was roughly flat YoY, with NVDA and ASML the bright sparks. NVDA’s 3x spike in revenue helped to offset weakness in Memory and Foundry.

– Processor and Memory companies expecting growth to accelerate on AI demand, while Equipment manufacturers still seeing low utilisation rates.

– Outlook for 4Q23e generally more optimistic, with expectations of a bottoming in the semiconductor industry as demand slowly returns, and inventory levels normalise. Growth is expected to come from increasing AI-related spending on GPUs and Memory.

PSR Stocks Coverage

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