DAILY MORNING NOTE | 12 January 2024
Trade of the Day
Analyst: Zane Aw
(Current Price: US$478.33) – TECHNICAL SELL
Sell stop: US$472.95 Stop loss: US$487.00 (-2.97%)
Take profit 1: US$446.00 (+5.70%) Take profit 2: US$418.00 (+11.62%)
Trades Initiated in the past week
Singapore shares rose on Thursday (Jan 11) alongside most key regional bourses after US equity markets rallied overnight as sentiment turned positive ahead of US inflation data. It gained 21.45 points or 0.7 per cent to 3,201.41, buoyed by gains on Wall Street on the back of broad expectations that the deceleration of inflation in the US is set to continue. Across the broader market, turnover in the local bourse came in at 1.01 billion securities worth S$760.6 million. Gainers outpaced losers 338 to 212. Markets are hoping to glean some insight on the trajectory of the Federal Reserve’s rate cuts with the release of the much-awaited consumer price index out of the world’s largest economy.
Wall Street stocks were little changed on Thursday as investors largely shrugged off disappointing inflation data. The Department of Labor’s consumer price index, a key measure of inflation, was up 3.4 per cent from a year ago and up slightly from November. The data had been keenly anticipated for its implications on potential Federal Reserve interest rate cuts. But after a meandering session, the Dow Jones Industrial Average finished up less than 0.1 per cent at 37,711.02. The broad-based S&P 500 fell 0.1 per cent to 4,780.24, while the tech-rich Nasdaq Composite Index was unchanged at 14,970.19.
Real estate group Ho Bee Land expects its net losses for the full year ended Dec 31, 2023 to widen from its current net-loss position for the six months ended Jun 30, 2023, it said in a bourse filing on Thursday (Jan 11). The group is attributing the projected increase in net losses mainly to fair-value loss based on indicative valuations of its portfolio of investment properties in London. It noted that its London portfolio’s fair-value loss is non-cash in nature, and arose mainly due to higher capitalisation rates. Further details of the group’s financial performance will be disclosed when the company announces its unaudited FY2023 results on or before Feb 26.
Keppel and Pan-United Corporation on Thursday (Jan 11) inked a memorandum of understanding (MOU) with industry leaders to jointly develop and commercialise low-carbon technologies. The industry leaders are Chevron Singapore, Surbana Jurong, Air Liquide Singapore, Osaka Gas Singapore and Pavilion Energy. Together with Keppel and Pan-United, they make up the Low-Carbon Technology Industry Consortium (LCT-IC). The group will accelerate the development of cost-effective carbon capture, utilisation and sequestration (CCUS), as well as the production, transportation, distribution and utilisation of lower-carbon hydrogen and its derivatives at scale, the parties said in a statement. The aim is to commercialise new lower-carbon technology pathways in Singapore, they added, to help Singapore achieve its target of net-zero emissions by 2050.
Department store operator Metro has acquired an additional 6 per cent equity stake in China property developer Top Spring International for HK$93.2 million (S$15.9 million). Crown Investments, an indirect wholly owned subsidiary of Metro, entered into a sale-and-purchase agreement with Chance Again, a substantial shareholder of the Hong Kong-listed Top Spring, to purchase 84.8 million shares – 6 per cent of the total number of issued shares – from Top Spring, the group said in a bourse filing on Thursday (Jan 11). Top Spring is a real estate property developer in China specialising in the development and operation of urban mixed-use communities, as well as the development and sale of residential properties. The latest investment brings Metro’s stake in Top Spring to 22.17 per cent.
Riding on the strong demand for strata offices, PGIM Real Estate (PGIM RE) plans to embark on strata sales at 108 Robinson Road this quarter. The 12-storey freehold office building underwent an extensive revamp that was completed in June 2023. PGIM RE has already started leasing some of the lower office floors. “Units will be compellingly priced relative to recent transactions in the area,” PGIM RE said, probably alluding to the above-S$4,000 psf at which most of the strata office floors at the freehold Solitaire on Cecil transacted last year.
US Consumer prices increased more than expected in December as rents maintained their upward trend, which could delay a much anticipated interest rate cut in March from the Federal Reserve. The consumer price index (CPI) rose 0.3 per cent last month after nudging up 0.1 per cent in November, the Labor Department’s Bureau of Labor Statistics said on Thursday (Jan 11). The cost of shelter accounted for the more than half of the increase in the CPI. In the 12 months through December, the CPI rose 3.4 per cent after increasing 3.1 per cent in November. Economists polled by Reuters had forecast the CPI gaining 0.2 per cent on the month and climbing 3.2 per cent on a year-on-year basis. Since slowing to an annual increase of 3.0 per cent last June, further progress towards lower consumer inflation has been limited by persistently high rents. The annual increase in consumer prices has cooled from a peak of 9.1 per cent in June 2022. The report followed news last Friday that the economy added 216,000 jobs in November, with annual wage growth picking up.
The U.S. government ran up another half a trillion dollars in red ink in the first quarter of its fiscal year, the Treasury Department reported Thursday. For the period from October 2023 through December 2023, the budget deficit totalled just shy of $510 billion, following a shortfall of $129.4 billion in just December alone, which was 52% higher than a year ago. The jump in the deficit pushed total government debt past $34 trillion for the first time. Compared to last year, which saw a final deficit of $1.7 trillion, 2024 is running even hotter. In the first quarter of fiscal 2023, for example, the difference between spending and receipts totalled $421.4 billion. On an unadjusted basis, that’s an increase of $89 billion between fiscal 2024 and last year. Adjusted for calendar factors, the Treasury Department said the change between the two years is actually $97 billion. December’s shortfall was higher by more than $34 billion compared to the previous year, driven by higher Social Security payments and interest costs. If the current pace continues, 2024 would end with a deficit of just more than $2 trillion.
Google cut several hundred jobs across the company late Wednesday night as it continues to push for efficiency and focus on its “biggest product priorities,” a spokesperson confirmed to CNBC. The layoffs will impact employees within Google’s hardware and central engineering teams, as well as workers across Google Assistant, its voice-activated software product. Other parts of the company were also affected, according to Google. Shares of Alphabet, which owns Google, closed down less than 1% on Thursday. The announcement marks the latest cost-cutting effort at Google as it works to rein in the dramatic headcount growth it pursued during the pandemic. Last January, Google slashed its workforce by 12,000 people, or roughly 6% of its full-time employees. The company made other cuts to its recruiting and news divisions later in the year.
Discord will lay off 17% of the company’s workforce, which equates to 170 employees, a spokesperson confirmed Thursday. The company, which provides a popular messaging service used by gamers, previously eliminated about 40 jobs in August and joins a growing list of companies to announce cuts at the start of this year. Discord CEO Jason Citron said in an internal memo that the layoffs are necessary for Discord to become more efficient after a hiring boom in 2020, according to The Verge, which first reported on the latest job cuts. Discord employed 870 people as of August, based on data from PitchBook. Discord, which ranked 18th on CNBC’s Disruptor 50 list for 2023, was valued at about $15 billion in 2021 at the height of the tech boom. The market contracted dramatically for high-risk tech in 2022 as soaring inflation and rising interest rates crimped growth and made capital costs more expensive.
Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR
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