Daily Morning Note – 11 May 2021
Stocks look set to drop at the open in Asia Tuesday after a slide in U.S. equities as surging commodity prices stoked concern about inflation. Treasury yields rose.
Futures dipped in Japan, Australia and Hong Kong. U.S. contracts slipped after the Nasdaq 100 Index tumbled 2.6% amid the growing anxiety over inflation, which can threaten longer-horizon revenues typical of the technology sector. Tesla Inc. and Apple Inc. were among the biggest decliners. The benchmark S&P 500 Index fell from an all-time high, while the Dow Jones Industrial Average briefly topped 35,000 for the first time.
Copper jumped to a record while iron ore futures surged more than 10%. West Texas Intermediate crude fluctuated after a cyberattack forced the closure of a key U.S. pipeline, which operators hope to reopen by the end of the week.
Keppel Offshore & Marine (Keppel O&M), has through its wholly owned subsidiary Keppel Shipyard, secured a contract worth about US$2.3 billion. The contract was awarded by Brazil’s national oil company, Petroleo Brasileiro SA (Petrobras) on the basis of an international tender for the delivery of P-78, a floating production storage and offloading vessel (FPSO). Slated for delivery in late 2024, the FPSO will deployed in Brazil’s deepwater Buzios field. The P-78 is expected to have a production capacity of 180,000 barrels of oil per day, 7.2 million cubic metres of gas per day and a storage capacity of two million barrels of oil. It will rank among the largest in the global operating fleet of FPSOs, said Keppel Corp in a statement on Monday.
Coffee shop operator Kimly on Monday posted net profit of S$21.7 million for the first six months of the year ended March, more than doubling from S$10.5 million in H1 FY2020 net profit on the back of higher revenue and improved gross margin. Group revenue for the half-year period rose 14.2 per cent to S$122.6 million from S$107.4 million the previous year, as revenue contributions grew year on year across all business divisions of the group. The bulk of group revenue growth for H1 came mainly from the food retail division, which saw higher contributions from existing food stalls and increased food delivery sales, as well as from new food stalls and confectionery shops opened over FY2020.
In a business update, glovemaker UG Healthcare posted a net profit of S$34.3 million for the third quarter ended March 31, 2021, almost 57 times its net profit in the previous year. The group produced and sold a higher volume of gloves and had relatively stable average selling prices of both nitrile and natural latex gloves in key markets during the quarter. As a result, revenue more than doubled to S$93.5 million from S$38.6 million, even surpassing the S$91.8 million recorded for the nine-month period ended March 31 the year before.
Beverage and publishing company Fraser and Neave (F&N) on Monday posted a 16.1 per cent rise in net profit to S$83.4 million for the half-year ended March 31, 2021. Revenue increased 2 per cent to S$988.6 million. This was due to higher volumes in the beverages – comprising soft drinks and beer – and dairies segments in the food and beverage division, which recorded a 3 per cent rise in revenue to S$868.1 million. Revenue from the sale of beer nearly doubled, while improvement in soft drink sales was driven by higher sales from the vending business and functional products. Dairies revenue inched up 1 per cent due to higher canned milk sales and strong export volumes to Middle East and Africa.
Catalist-listed manufacturing-service provider Grand Venture Technology on Monday posted a first-quarter net profit after tax of S$3.3 million – five times higher than the figure in the preceding year. This was due to a 59 per cent rise in revenue to S$23 million, growing wallet share from its key customers as well as stronger gross profit margins, said the group in a business update.
In a business update, transport operator SBS Transit posted a profit after tax of S$23.3 million for the first quarter ended March 31, 2021, more than doubling from S$11.1 million the year before. Revenue fell 6.5 per cent to S$317 million but operating profit increased 70.9 per cent to S$24.9 million. Without Covid-19 government reliefs, operating profit would have fallen 52.5 per cent to S$6.3 million.
Amazon said Monday it blocked more than 10 billion suspected listings of counterfeit goods on its platform last year as part of a global crackdown in the face of pressure from consumers, brands and regulators. The e-commerce colossus made the announcement in its first “brand protection report”, as part of its initiative to weed out listings of fakes by third-party sellers. The report said Amazon seized some two million counterfeit products last year and destroyed them to prevent them from being resold elsewhere. The company said it invested some US$700 million in the anti-counterfeiting initiative, including in machine learning technology, and “blocked more than 10 billion suspected bad listings before they were published in its stores”.
Ant Group, an affiliate of Alibaba, is becoming one of the first major privately run businesses to work with China’s digital currency trials. MYbank — an online-only bank in which Ant has a 30% stake — is allowing some users to link their accounts with China’s digital yuan app, state-backed China Securities Journal said Monday. The new feature is accessible to some users through Ant’s Alipay app, another report from the journal said. Alipay is one of the two primary mobile pay apps in China, where using smartphones for daily payment transactions is the norm.
A group of 40 state attorneys general on Monday urged Facebook chief executive Mark Zuckerberg to abandon plans to launch a version of Instagram for children under the age of 13. “Use of social media can be detrimental to the health and well-being of children, who are not equipped to navigate the challenges of having a social media account,” the officials said in a letter that was also signed by the attorneys general of the District of Columbia and three US territories. “Further, Facebook has historically failed to protect the welfare of children on its platforms.”
BioNTech announced Monday it will set up its Southeast Asia headquarters in Singapore, and will build a manufacturing facility in the city-state to produce its messenger RNA vaccines and other medicines to treat infectious diseases and cancer. The new site would be able to produce hundreds of million doses of mRNA-based vaccines each year, depending on the specific vaccine. The facility could be operational as early as 2023, the German biotechnology company said. It would allow the firm to scale up production for Southeast Asia to address future pandemic threats.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
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