Daily Morning Note – 11 March 2022
Major US stock indices finished Thursday’s trading lower as fears of a protracted conflict in Ukraine that could harm the global economy sapped traders’ enthusiasm. The benchmark Dow Jones Industrial Average closed 0.3 per cent lower at 33,174.07. The broad-based S&P 500 lost 0.4 per cent to 4,259.52. The tech-rich Nasdaq Composite Index fell 1 per cent to 13,129.96. Investors are looking ahead to next week, when the Federal Reserve is poised to raise interest rates for the first time since the pandemic broke out. That is expected to be the first of several increases this year to fight inflation in the United States, but the central bank may not move as aggressively as previously thought due to the potential for growth to slow.
Euro zone stocks fell on Thursday after the European Central Bank surprised markets by accelerating its exit from pandemic-related stimulus. An index of euro zone stocks closed down 2.5 per cent having fallen up to 3 per cent, while blue-chips slumped 3 per cent. But euro zone bond yields soared and banks cut some session losses, as the ECB planned to end asset purchases in the third quarter, earlier than expected, prioritising soaring inflation over the potential economic impact of Russia’s invasion of Ukraine.
The Singapore Exchange Regulation (SGX RegCo) has issued a notice of compliance to learning-solutions company Alpha DX Group after 4 directors of the firm quit over the span of just 2 weeks. Under SGX RegCo’s directives, Alpha DX will have to obtain and disclose “detailed explanations” from each of the 4 directors who have resigned – namely Chang Chi Hsung, Max Ng Chee Weng, Chew Yean Nee and Fabian Sven Bahadur Scheler – by Mar 16.
In response to queries from the SGX Regulation (SGX RegCo), No Signboard Holdings said the move to enter into a deal with Q&M Dental‘s chief executive Ng Chin Siau is intended to form a key part of the company’s trading resumption proposal. In a bourse filing on Thursday (Mar 10), the restaurant operator said that it, along with its controlling shareholder GuGong, is currently focused on finalising agreements with Ng and investors to raise the financing the group requires to address its going concern issues. In the event that No Signboard is unable to enter into the loan agreements with Ng and other investors to raise the necessary financing, it will then move to discuss other alternatives with its financial adviser, said the company.
Canned food brand Del Monte Pacific on Wednesday (Mar 9) posted earnings of US$25.9 million for the third fiscal quarter ended January, down 14 per cent from net profit of US$30.2 million in the corresponding year-ago period. This took the group’s net profit for the 9-month period to US$80.1 million, up 64.2 per cent from earnings of US$48.8 million in the comparable period for the previous year. “Cost headwinds in the third quarter were quite significant impacting margins and profits,” said Del Monte Pacific’s chief executive Joselito Campos Jr. “While the road ahead has many challenges, we remain relentless in our revenue-enhancement and razor-focused on cost-saving initiatives.”
Logistics company has entered into DHL Express an agreement with flag carrier Singapore Airlines (SIA) to deploy 5 Boeing 777 freighters, the companies said in a joint statement on Thursday (Mar 10). The freighters will be based at Changi Airport and serve DHL’s South Asia Hub located in Singapore. SIA will oversee the maintenance of the aircrafts, and SIA pilots will operate the aircraft on routes to the US via points in North Asia. The initial agreement is set for more than 4 years with the opportunity for an extension; the first aircraft will be delivered in July 2022, the second in October 2022, and the remaining 3 aircraft are planned for delivery throughout 2023.
Local telco StarHub has been granted regulatory approval by the Infocomm Media Development Authority (IMDA) on Wednesday (Mar 9) to acquire a 50.1 per cent stake in MyRepublic’s broadband unit. In its decision on the proposed consolidation, IMDA found that the move could result in a horizontal consolidation as both companies compete in public Internet access services, Internet protocol telephony services and managed data network services. Still, it found that the move was unlikely to substantially lessen competition in any of the identified markets. Post-acquisition, StarHub had 34 per cent of broadband market share while MyRepublic had 6 per cent as at September last year. The market leader, Singtel, held 43.4 per cent of broadband market share, or 656,000 subscribers in the same period.
Singapore-based property-listings platform PropertyGuru is set to list on Nasdaq in the middle of this month after a business combination with Bridgetown 2 Holdings, a special-purpose acquisition company (SPAC). This would happen after – it is assumed – shareholders vote in favour of the business combination in an extraordinary general meeting on Mar 15. Bridgetown 2 is a SPAC backed by billionaires Peter Thiel and Li Ka Shing. The SPAC merger values PropertyGuru at about US$1.78 billion.
Goldman Sachs Group Inc and JPMorgan Chase became the first U.S. banks to wind down business in Russia after it invaded Ukraine, while Credit Suisse (CSGN.S)said it had gross exposure to Russia of 1.6 billion Swiss francs ($1.73 billion) at the end of last year. Goldman Sachs, which has a credit exposure to Russia of $650 million, said on Thursday it was winding down its business there, in a move that will likely increase pressure on rival lenders to follow. Any losses would be “immaterial,” according to a source familiar with the situation. Just hours later, JPMorgan said it was “actively unwinding Russian business” and was not pursuing any new business there. The largest U.S. bank said its operations in Russia are currently limited to helping global clients address and close out pre-existing obligations and manage their Russian-related risk, as well acting as a custodian for client assets.
TikTok is nearing a deal for Oracle Corp to store its U.S. users’ information without its Chinese parent ByteDance having access to it, hoping to address U.S. regulatory concerns over data integrity on the popular short video app, people familiar with the matter said. The agreement would come a year and a half after a U.S. national security panel ordered ByteDance to divest TikTok because of fears that U.S. user data could be passed on to China’s communist government.
Prices kept rising last month in America, pushing a key inflation measure to a level not seen since January 1982. The Consumer Price Index, which measures a basket of goods and services, stood at 7.9% over the 12-month period that ended in February, without seasonal adjustments, the Bureau of Labor Statistics reported Thursday. That was in line with what economists had predicted. Prices for gas, food and housing — which are necessary rather than discretionary spending — drove the February price increases. February prices rose 0.8%, adjusted for seasonal swings, a larger increase than in January. Food prices rose 1% last month, the largest monthly increase since April 2020. Over the past 12 months, food prices went up 7.9%, the biggest jump since July 1981. Grocery store prices rose at an even faster pace of 8.6% over the same period, the biggest increase since April 1981. Gasoline prices alone rose 6.6% and contributed nearly a third of the overall inflation increase in February. Over the past year, they have risen 38%.
Moderna’s board of directors approved a golden parachute for CEO Stephane Bancel worth more than $926 million at the end of last year, up from $9.4 million in 2019 before Covid-19 upended the world order. The value of Bancel’s so-called change-in-control package has varied as a bulk of it, $922.5 million, is in the biotech company’s stock, which has swung widely over the course of the pandemic along with the company’s progress in making a vaccine to fight it. Bancel’s exit package also includes a cash severance payment of $1.5 million and a bonus of $2.5 million if the company is sold and he’s terminated.
Shares of Rivian Automotive tumbled in after-hours trading Thursday after the company missed Wall Street’s fourth-quarter earnings expectations and forecast a modest increase in vehicle production for 2022. Shares of the automaker were down by more than 14%, after earlier hitting a new 52-week low Thursday. Rivian said it expects to produce 25,000 electric trucks and SUVs this year, as the electric vehicle start-up battles through supply chain constraints and internal production snags. It said reservations for its vehicles have reached about 83,000 as of March 8, up from 71,000 in December.
JD.com posted a quarterly loss on Thursday (Mar 10) as its operational costs surged, and reported its weakest revenue growth in 6 quarters amid slowing consumer spending, sending shares in the Chinese e-commerce firm down 6 per cent in premarket trade. The slowdown in the world’s second-largest economy has taken a toll on its e-commerce sector, as consumers cut back on discretionary spending. Last month, rival Alibaba posted its slowest revenue growth for the same period since going public in 2014. The online retailer, which enjoys a competitive edge over its rivals due to its investments in supply chain and logistics, said fulfilment costs were also up 10.7 per cent. Net loss attributable to shareholders for the fourth quarter of 5.2 billion yuan, compared to a profit of 24.3 billion yuan last year.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Click the link to join: https://t.me/stocksbnb
For any research-related matters, email: email@example.com
For general enquiries, email: firstname.lastname@example.org
or call 6531 1555.
Read the research report(s), available through the link(s) above, for complete information including important disclosures Important Information
The information contained in this email is provided to you for general information only and is not intended to create any binding legal relation. The information or opinions provided in this email do not constitute investment advice, a recommendation, an offer or solicitation to subscribe for, purchase or sell any investment product. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise.
You should obtain advice from a financial adviser before making a commitment to invest in any investment product or service. In the event that you choose not to obtain advice from a financial adviser, you should assess and consider whether the investment product or service is suitable for you before proceeding to invest.
This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.