DAILY MORNING NOTE | 13 October 2023

Local shares finished the trading day higher on Thursday (Oct 12), as markets around the world regained their momentum. Traders were, however, keeping a close watch on inflation data from the US, which is set to be released later on Thursday. Jardine Matheson Holdings was the top gainer. The counter rose 2.9 per cent or US$1.24 to finish the day at US$44.16. Venture Corporation was one of the top decliners for the day, shedding 0.5 per cent or S$0.06 to S$12.28. Wilmar International was another notable decliner, losing 1.3 per cent or S$0.05 to S$3.68. The trio of local lenders were also among the top advancers for the day. DBS rose 0.8 per cent or S$0.28 to S$34.00; UOB added 0.7 per cent or S$0.19 to S$28.69, while OCBC gained 0.6 per cent or S$0.08 to S$13.08.

US stocks ended the day in the red on Thursday, while bond yields rose, after a steady inflation print fueled concerns that interest rates will need to stay higher for longer. The US consumer price index rose 3.7 per cent in September from a year ago, in line with analyst expectations but still above the Federal Reserve’s long-term inflation target. Fed policymakers recently indicated they expect interest rates will need to remain higher for longer than previously expected to definitively bring inflation down to its two per cent goal. The Dow Jones Industrial Average closed down 0.5 per cent at 33,631.14. The broad-based S&P 500 fell 0.6 per cent to 4,349.61, while the tech-rich Nasdaq Composite Index slipped by the same amount to end the trading day at 13,574.22.

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SG

Mainboard-listed pawnbroking chain ValueMax Group has launched the first series of its two-month commercial paper (CP) in digital securities on Singapore’s Digital Assets Exchange (SDAX), “in response to substantial interest received from investors”. On Thursday (Oct 12), the group said it expects to raise S$8 million to S$20 million from accredited investors and institutional investors. The final amount will be determined by the company’s board after accounting for demand from investors. Issued under the SDAX CP facility programme, the Series 001 issuance is priced at 5.1 per cent per annum. The digital securities mature about two months from their date of issuance on Oct 12. The group said it will make further announcements on any material developments regarding the SDAX CP facility programme, as well as its two-month Series 001 SDAX issuance.

The total number of issued shares of Healthway Medical held in public hands is less than the 10 per cent free float requirement, said the company on Thursday (Oct 12). This is based on the aggregate number of three billion shares, or 65.3 per cent of the total shares, held by OUE Healthcare and its concert parties as at 6 pm on Tuesday. Healthway Medical also noted that OUEH Investments intends to delist the company, regardless of the acceptance level of the exit offer. The offeror does not intend to lift a potential trading suspension, either. OUEH Investments’ privatisation offer turned unconditional in all respects on Sep 28. The delisting application was made on Oct 3, and the company will update on the outcome in due course. The exit offer of S$0.048 per offer share will remain open for acceptance until 5.30 pm on Oct 26, which OUEH Investments will not extend. Any applications received after the closing time will be rejected.

Oiltek International on Thursday (Oct 12) said that its wholly-owned subsidiary obtained RM40.1 million (S$11.6 million) worth of new contracts in Indonesia and Malaysia. The new wins bring the group’s current order book to around RM357.2 million and the total contracts won in fiscal 2023 so far to RM260 million, the integrated process technology and renewable energy solution provider said. The group will design, fabricate, deliver, test and commission two shortening plants and one cocoa butter substitute plant in Indonesia, as well as a new dry fractionation plant in Malaysia. It plans to fulfil its order book over the next 18 to 24 months, provided there are no unforeseen circumstances. Oiltek expects the contracts to contribute positively to the group’s performance for the year ending Dec 31, 2024, with no material impact on its FY2023 performance.

The latest six-month tenor of the Singapore Treasury bills (T-bills) is offering a cut-off yield of 3.87 per cent, at the close of its auction on Thursday (Oct 12). This is down from the cut-off yield of 4.07 per cent offered in the last auction for the six-month T-bills. Nevertheless, the latest cut-off yield is still higher than the 3.73 per cent offered two auctions ago, which closed on Sep 14. Applications for the T-bills jumped in the latest auction. The auction received applications worth a total of S$14.7 billion for the S$5.4 billion on offer, representing a bid-to-cover ratio of 2.73. In comparison, the previous auction received S$9.3 billion in total applications for the S$5.3 billion on offer, representing a bid-to-cover ratio of 1.76.

US

Blackstone is moving its head of China private equity investments to oversee private wealth for Asia-Pacific, in a bid by the world’s biggest alternative-asset manager to bolster revenue from rich clients in the region. Ed Huang, who has also been chief operating officer (COO) for Asia private equity, will take over as head of the region’s wealth division, the company said in a statement Thursday (Oct 12), confirming a Bloomberg News report. Haide Hong will take on Huang’s previous role and has been named as the head of acquisitions for China. A senior managing director and a 10-year veteran of Blackstone, Hong returned to Asia from London two years ago and will now lead investment efforts in Shanghai. The appointments will take effect Jan 1. Blackstone has ramped up hiring in the region, seeking to build up its funds by tapping private banks, wealth advisers and family offices. Blackstone’s private wealth business has US$240 billion in assets, nearly a quarter of the firm’s total assets under management.

The US dollar strengthened on Thursday (Oct 12) after the country’s consumer prices rose more than expected in September, influenced by higher petrol prices, suggesting the Federal Reserve may keep interest rates elevated for some time. The consumer price index (CPI) increased 0.4 per cent last month, after jumping 0.6 per cent in August, which was the largest increase in 14 months. The US dollar index rose 0.379 per cent at 106.060, while the euro was down 0.4 per cent to US$1.0575. The rise in the greenback follows recent weakness that was driven by declining Treasury yields, as bond prices rallied on the Fed’s softer stance on future rate rises. Bond yields move opposite to their price. The yield on 10-year Treasury notes was down a touch at 4.575 per cent. It hit its highest since 2007 last week at 4.887 but is down more than 20 bps this week.

Qualcomm, the largest maker of chips that run smartphones, is reducing its workforce to cope with lacklustre demand for its main product. The company is eliminating 1,258 positions in San Diego and Santa Clara, California, according to submissions to the California Employment Development Department. A Qualcomm representative declined to comment on the overall size of the reductions to its 50,000 workforce. More than 750 of the positions being eliminated are from Qualcomm’s engineering ranks, including at levels from director down to technician. The rest of the cuts will come from a broad range of roles such as internal technical staff and accounting. The job reductions will begin about mid-December, Qualcomm said in the notifications. The San Diego-based company is required to make the filings under California rules. Those obligations on announcements of job cuts do not apply to the company’s other locations.

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


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