DAILY MORNING NOTE | 11 January 2024

Trade of the Day

Hongkong Land Holdings Ltd (SGX: H78)

Analyst: Zane Aw

(Current Price: S$3.45) – TECHNICAL BUY
Buy price: S$3.45 Stop loss: S$3.33 (-3.48%)
Take profit 1: S$3.64 (+5.51%) Take profit 2: S$3.71 (+7.54%)

Factsheets


Raffles Medical Group (SGX: BSL)

Analyst: Zane Aw

(Current Price: S$1.06) – TECHNICAL SELL
Sell stop: S$1.04 Stop loss: S$1.07 (-2.88%)
Take profit: S$0.950 (+8.65%)

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Trades Initiated in the past week

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Singapore shares fell on Wednesday (Jan 10) alongside most key regional bourses following Wall Street’s overnight losses and ahead of the much-awaited US inflation data. It lost 18 points or 0.6 per cent to 3,179.96, after US stock indices fell overnight with the tech rally petering out and as US banks kick off the earnings season on Friday. Except for Japan which climbed to fresh three-decade highs, key gauges from Hong Kong, China and South Korea to Malaysia and Australia all finished lower.

Wall Street stocks roseon Wednesday as markets awaited key US inflation data expected to influence upcoming Federal Reserve monetary policy decisions. Thursday’s consumer price index report for December is certain to show moderation compared with the mid-2022 peak of more than nine percent in year-over-year price hikes. But just how much moderation it demonstrates will influence expectations for the Fed. Investors are currently somewhat less certain that the US central bank will start interest rate cuts as soon as March. The Dow Jones Industrial Average finished up 0.5 per cent at 37,695.73. The broad-based S&P 500 advanced 0.6 per cent to 4,783.45, while the tech-rich Nasdaq Composite Index jumped 0.8 per cent to 14,969.65.

Top gainers & losers

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Events Of The Week

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SG

Two units of Soilbuild Construction Group have bagged S$24.3 million in new contracts, the company said in a bourse filing on Wednesday (Jan 10). Soil-Build, a wholly-owned subsidiary, has been awarded a construction contract by SB (2TS) Investment for demolition and piling works for a multi-user industrial development at Tuas South Avenue. Construction for the development – billed as the Tuas South Project – is set to start in the first quarter of 2024 and to be completed by Q3.

Restaurant operator No Signboard has proposed to acquire a majority stake in catering firm Dining Haus for S$1.2 million, the company said in a bourse filing on Wednesday (Jan 10). The company has entered into a share sale and purchase agreement with Chia Shu Sian – chief executive officer of Dining Haus – and No Signboard’s investor Gazelle Ventures, for the proposed acquisition of 60 per cent of the entire issued and paid-up capital of Dining Haus. In connection with the proposed acquisition, No Signboard has also entered into a shareholders’ agreement with Chia. The purpose of the agreement is to regulate the relationship between Dining Haus’ shareholders; to set out the basis in which Dining Haus’ business affairs will be managed and controlled; as well as to provide for shareholders’ rights and duties. Chia owns the entire issued and paid-up capital of Dining Haus and Eat What, a company that provides institutional catering services to clients at industrial sites in Singapore.

City Developments Ltd (CDL) and Far East Organization opened the year’s season for new housing launches with their Lumina Grand executive condominium (EC) and Hillhaven condo projects. Units on offer at CDL’s Bukit Batok EC Lumina Grand range from 936 square feet (sq ft) for a three-bedroom to 1,711 sq ft for a five-bedroom unit. Prices start from around S$1.34 million, or about S$1,429 per square foot (psf) for three-bedroom units; S$1.39 million (S$1,432 psf) for three-bedroom premium; S$1.63 million (S$1,413 psf) for four-bedroom units; and S$2.1 million (S$1,402 psf) for five-roomers. Located at the junction of Bukit Batok West Avenue 5 and Bukit Batok Road, Lumina Grand EC is a 512-unit development that is close to Tengah Town. The project comprises 10 residential blocks of 12 to 13 storeys, on a site area of around 179,000 sq ft, said CDL on Wednesday (Jan 10). In the Hillview area, Far East and Sekisui House will launch their 99-year leasehold condo Hillhaven on Jan 20, with prices starting from S$1,907 psf. Hillhaven, in the Hillview area, will house 341 units in two blocks. Prices start from S$1.37 million (S$2,020 psf) for a 678 sq ft two-bedroom unit. Three-bedroom units, some of which include a study, are sized from 947 sq ft to 1,195 sq ft and start from S$1.835 million (S$1,938 psf). Four-bedroom units at 1,259 sq ft to 1,636 sq ft start from S$2.44 million (S$1,938 psf).


US

Applications for home-purchase mortgages in the US increased last week by the most since June as borrowing costs hovered near a seven-month low. The Mortgage Bankers Association’s gauge of mortgage applications to buy a home increased 5.6 per cent in the week ended Jan 5, which included the New Year’s Day holiday. An index of overall mortgage applications, which also includes refinancing, climbed 9.9 per cent, the sharpest advance in nearly a year. They tend to be more volatile around holidays, helping explain some of the big drops and rises in recent weeks. The contract rate on a 30-year fixed mortgage ticked up 5 basis points to 6.81 per cent, its second straight increase. Overall, rates are hovering around levels seen last summer and below the highs reached during the fall, when they approached 8 per cent.

Amazon.com will lay off several hundred employees in its streaming and studio operations, it said in an internal note on Wednesday (Jan 10) as companies extend their massive job cuts over the past two years into 2024. The staff facing exit at Prime Video and Amazon MGM Studios in the Americas will be informed on Wednesday and in most other regions by the end of the week. The online retail behemoth has cut more than 27,000 jobs last year as part of a wave of US tech layoffs after the industry hired heavily people during the pandemic.

United States regulators for the first time approved exchange-traded funds (ETFs) that invest directly in Bitcoin, a move heralded as a landmark event for the roughly US$1.7 trillion digital asset sector that will broaden access to the largest cryptocurrency on Wall Street and beyond.The Securities and Exchange Commission (SEC), whose three-part mandate includes investor protection, authorised 11 funds to begin trading on Thursday (Jan 10). The approvals also mark a rare capitulation by the SEC following opposition that lasted for more than a decade, ever since Tyler and Cameron Winklevoss first proposed a Bitcoin ETF in 2013. BlackRock’s surprise application last June, followed by an appeals court ruling that called the denial of a different application “arbitrary and capricious”, triggered a blistering rally in the cryptocurrency as speculation that US regulators would finally give their blessing to the structure. The decision comes a day after a false post on the SEC’s X account claimed that the agency had approved the ETFs. The regulator subsequently said that the account had been compromised, causing the price of Bitcoin to fluctuate widely.

Taiwan Semiconductor Manufacturing Co’s (TSMC) fourth-quarter revenue beat estimates of a decline, as demand from artificial intelligence players helped offset sluggish smartphone and laptop chip sales. Hsinchu-based TSMC, the main chipmaker to Apple and Nvidia, reported December sales of NT$176.3 billion (S$7.5 billion), completing a NT$625.5 billion quarter. That matched earnings from the same period a year earlier, which was among TSMC’s highest quarterly results. The average analyst estimate for sales over the last three months was NT$616.2 billion. Over the course of 2023, TSMC moderated its capital expenditure plans as the consumer electronics industry grappled with a glut of unsold inventory. The chipmaker signalled the trough in demand had been reached in the summer and recovery would begin to take hold in the months leading up to 2024. Overall revenue declined 4.5 per cent last year, to NT$2.16 trillion.

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


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