DAILY MORNING NOTE | 11 July 2024

Singapore Shares hit a six-year high on Wednesday (Jul 10), after the blue-chip gauge surged 33.84 points or 1 per cent to 3,459.93. Glenn Thum, research analyst at Phillip Securities, noted that the bourse’s performance was broad based and the gains were not in any particular sector. “This increase might be due to expectations of good results ahead of the earnings release for all the companies,” he said. DBS charged ahead of its peers, jumping S$0.75 or 2 per cent to S$38.15, slightly lower than its 52-week high of S$38.17. 20 constituents posted higher prices by the closing bell, led by Thai Beverage’s : 3.4 per cent increase to S$0.46.

Wall Street stocks powered higher on Wednesday with major indices finishing up more than one percent, hitting fresh records amid rising expectations for upcoming interest rate cuts. Both the S&P 500 and Nasdaq ended at all-time highs following comments from US Federal Reserve Chair Jerome Powell that the central bank would not wait until inflation hit two per cent before considering a rate cut. The Dow Jones Industrial Average gained 1.1 per cent to 38,921.37. The broad-based S&P 500 climbed 1.0 per cent to 5,633.91 for its sixth straight record, while the tech-centered Nasdaq Composite Index jumped 1.2 per cent to end at its seventh straight record.

Top gainers & losers

Events Of The Week

SG

The founder and chief executive of Second Chance Properties, Mohamed Salleh, and his family on Wednesday (Jul 10) proposed to privatise the company at S$0.30 per share in cash through a voluntary unconditional offer. As at Wednesday, the company has an issued and paid-up share capital of about S$174.7 million, comprising 927.8 million shares. Salleh and his family own around 789.2 million shares in Second Chance, representing about 85.06 per cent of the total number of issued shares. The offer price of S$0.30 per share represents a premium of about 39.5 per cent over Second Chance’s last traded price of S$0.215 on Jul 9, the last full trading day before the offer announcement. It is also at a slight 0.5 per cent discount to the group’s net asset value per share of S$0.3016 as at end-February. Salleh and his family said that they intend for the company to continue to develop and grow its existing businesses.

Shares of Yoma Strategic fell as much as 21.5 per cent on Wednesday (Jul 10) morning, following the group’s clarification that no charges have been filed against its executive chairman Serge Pun. The counter was down S$0.03 to S$0.113, with 30.9 million shares having changed hands as at 9.22 am. The last time it closed near this level was June. By 11.08 am, Yoma was the most actively traded counter by volume. Its shares were trading down 14.6 per cent or S$0.021 at S$0.123. No married deals were recorded in early trade, ShareInvestor data showed.

The Singapore Exchange Regulation (SGX RegCo) on Wednesday (Jul 10) queried Nanofilm Technologies for “unsual price movements” after the group’s shares climbed as much as 10.1 per cent after the midday trading resumed. The nanotechnology solutions provider subsequently called for a trading halt to respond to SGX RegCo’s query. Its shares were last trading 8.3 per cent or S$0.07 higher at S$0.91 as at 3.16 pm. Prior to the halt, Nanofilm counter neared a seven-month high, jumping as much as S$0.085 to S$0.925 as at 1.24 pm, before the bourse regulator query at 1.37 pm. The last time Nanofilm’s shares closed near this level was Dec 19, 2023.

US

Tyson Foods agreed to sell a chicken facility to House of Raeford Farms as part of efforts to restore profitability. Raeford Farms, a family-owned meat producer, plans to keep processing chicken at the Georgia plant with the existing workforce and grower network, Tyson said. Tyson will service customer orders from other locations, the company said without providing further details. With the move, Tyson shows it is seeking to further streamline its chicken operation even after shutting down six plants and cutting thousands of jobs last year amid an industry downturn that sent its earnings plunging.

The big rebound in Tesla shares over the past few months has pushed the electric-vehicle maker to its highest-ever weighting in Cathie Wood’s flagship US$6.2 billion exchange-traded fund (ETF). Tesla now represents 15.4 per cent of the ARK Innovation ETF (ticker ARKK) after rallying more than 80 per cent from its 2024 low set in April, data compiled by Bloomberg show. That’s even after the fund trimmed its positions in the Elon Musk-led company in recent weeks. The weighting amounts to the strongest conviction in the stock in the 10-year history of the disruptive tech fund, according to an analysis by Strategas Securities. Tesla has long been among Wood’s high-conviction holdings, and reclaimed the top position in ARKK in April to unseat Coinbase Global. The carmaker’s shares were on track to rise for a 10th straight session on Tuesday (Jul 9), the longest winning streak since June last year. The rally got a boost this month from quarterly deliveries that beat the average analyst estimate.

Riyadh Air has partnered with US carrier Delta Air Lines as the Saudi startup carrier grows its potential network ahead of launching commercial operations next year, the airlines said on Tuesday (Jul 9). Riyadh Air, owned by Saudi sovereign wealth fund PIF, will be a second national airline, based in the capital Riyadh, alongside existing flag carrier Saudia, based in Jeddah. Under the agreement, Atlanta-based Delta will serve as Riyadh Air’s exclusive partner in North America, offering its customers access to hundreds of US destinations. For Delta’s customers, the partnership will open new destinations in Saudi Arabia, the airlines said. The US carrier also plans to launch future nonstop service to Riyadh.

Oil giant Occidental Petroleum clinched a record carbon removal deal with Microsoft amid the software titan’s push to reduce its expanding emissions. Occidental, which is building a carbon-capture portfolio through its subsidiary 1PointFive, plans to build a fleet of plants that suck carbon dioxide (CO2) directly from the air. Microsoft on Tuesday (Jul 9) agreed to buy 500,000 tonnes of credits from the company’s Stratos plant in Texas, which is expected to start up next year. The deal marks the single largest purchase of credits generated by so-called direct air capture, or DAC – bolstering Occidental’s position in the race to scale and monetise carbon capture technology. For Microsoft, whose push into artificial intelligence (AI) has triggered a spike in emissions, such agreements are central to addressing a growing carbon footprint.

VinFast Auto, a Vietnamese electric vehicle maker, is looking for a bank loan of about US$250 million to fund construction of its assembly plant in Subang in Indonesia, according to people familiar with the matter. The company, a subsidiary of Vietnamese conglomerate Vingroup and controlled by the country’s richest person Pham Nhat Vuong, has approached banks in Indonesia for either a US dollar-denominated loan or one issued in the local currency, said the people, who asked not to be identified because the talks are private. Its talks with banks underscore the startup’s ambition to expand regionally to compete with other global EV makers, a market that has become highly competitive with deep price cuts that are eating into the sector’s earnings. Having launched its first model five years ago, VinFast will continue to have Vuong’s support until he runs “out of money,” he said in a Bloomberg Television interview last month.

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

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