DAILY MORNING NOTE | 13 July 2023

Trade of the Day

Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)

Analyst: Zane Aw

(Current Price: S$1.52) – TECHNICAL BUY
Buy price: S$1.52 Stop loss: S$1.47 Take profit: S$1.70

The application for the second fortnightly July tranche of MAS 6-month T-bills is open today for investors to apply. The Auction Date, where the cut-off yield for this tranche will be announced on 20th July 2023.

Latest Singapore 6-Month Treasury Bill result

Cut-Off Yield: 3.99%

% of Non-Competitive Application Allotted: 96%

Singapore shares extended their advance for the third consecutive day on Wednesday (Jul 12) following overnight gains on Wall Street. This comes amid heightened expectations that the soon-to-be released US inflation figures would indicate moderating price pressures. Singapore stocks finished 11.52 points or 0.4 per cent higher at 3,175.36. Elsewhere, key benchmarks in Japan and China fell, while those in Hong Kong, South Korea, Taiwan, Australia and Malaysia closed higher.

Wall Street stocks advanced Wednesday (Jul 12) following a surprisingly benign US inflation report that raised hopes the Federal Reserve will soon end its monetary tightening campaign. The consumer price index, a key inflation gauge, rose 3.0 per cent from a year ago last month, the smallest increase since March 2021 and down from May’s reading as well. The Dow Jones Industrial Average advanced 0.3 per cent to 34,347.43. The broad-based S&P 500 gained 0.7 per cent to 4,472.16, while the tech-rich Nasdaq Composite Index climbed 1.2 per cent to 13,918.96.

SG

Seatrium has secured a green trade finance facility from Oversea-Chinese Banking Corporation (OCBC) worth an estimated EUR720 million (S$1.04 billion). The facility, which comes with the issuance of a banker’s guarantee, is one of the largest syndicated financing solutions issued by a single bank for the maritime industry. The trade financing solution is aligned with internationally-recognised Green Loan Principles and will support Seatrium’s offshore renewable projects and decarbonisation efforts. As at March 31, renewables and cleaner or green solutions comprise about 39% of the group’s order book.

Mainboard-listed GSH Corporation has entered a sale and purchase agreement for the disposal of its Cecil Street property in Raffles Place for a consideration of S$38.8 million, the company said on Wednesday (Jul 12). The property was valued at S$37 million by an independent professional valuer, GSH added. It has a gross floor area of approximately 901 square metres, comprising nine strata units of offices. The purchaser, who was not named, is an unrelated party with no shareholding interest – direct or indirect – in the company or group.

Challenger Technologies has extended the closing date of its voluntary unconditional cash offer to 5.30pm on July 25, two weeks later than its original date of July 11. As at July 11, DigiTech Holdings, the offeror, received valid acceptances of around 390.1 million shares, representing 97.11% of the total number of shares in Challenger. Shares in the company were suspended after its free float fell below the required 10% in June. In its July 12 statement, Challenger, via its offeror, said that it does not intend to restore its public float or lift the trading suspension of its shares on the Singapore Exchange (SGX). It adds that it will exercise its rights of compulsory acquisition under the Companies Act to acquire all the shares from shareholders who have yet to accept the offer. The offer price will be equal to the final offer consideration, which was raised to 60 cents per share on June 6.

US

Amazon ’s Prime Day is off to a strong start, lifting third-party sellers’ and other retailers’ online sales, early data shows. On Tuesday, the first day of Amazon’s 48-hour sales event, online spending in the U.S. rose about 6% to $6.4 billion, making it the single-biggest e-commerce day so far this year, according to Adobe Analytics, which measures transactions at U.S. retail sites. Prime Day kicked off Tuesday and runs through Wednesday. Adobe expects total U.S. online sales to grow 9.5% year over year to $13.1 billion during the two-day event. Last year, U.S. consumers spent more than $11.9 billion.

The consumer price index, which measures inflation, increased 3% from a year ago, which is the lowest level since March 2021. On a monthly basis, the index, which measures a broad swath of prices for goods and services, rose 0.2%. That compared with Dow Jones estimates for respective increases of 3.1% and 0.3%. Stripping out volatile food and energy prices, core CPI rose 4.8% from a year ago and 0.2% on a monthly basis. Consensus estimates expected respective increases of 5% and 0.3%. The annual rate was the lowest since October 2021. In sum, the numbers could give the Federal Reserve some breathing room as it looks to bring down inflation that was running around a 9% annual rate at this time in 2022, the highest since November 1981.

Chipmaker Nvidia will invest $50 million in Recursion Pharmaceuticals to speed up the development of the biotech firm’s artificial intelligence models for drug discovery, the companies said Wednesday. Recursion’s stock soared 80% following the announcement. Shares of Nvidia, which have helped fuel stock market gains this year amid hopes about its AI computing chips, rose more than 2%. Recursion uses AI-powered models to identify and design new therapies, and offers those models to other drugmakers, including Roche and Bayer. Salt Lake City, Utah-based Recursion will use its biological and chemical datasets exceeding 23,000 terabytes to train its AI models on Nvidia’s cloud platform.

Shopify said on Wednesday (Jul 12) it would soon launch an artificial intelligence (AI) assistant for merchants on its platform, the latest technology company to roll out such a feature. The assistant called “Sidekick” would be embedded as a button on Shopify and answer merchant queries, including details about sales trends, CEO Tobi Lutke illustrated in a video posted on Twitter. The assistant can also help entrepreneurs update their stores on Shopify. For instance, it can apply discounts on all items on the website, if prompted to do so. The feature is “coming soon”, the video showed, without specifying the date when it would be rolled out.

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

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