Daily Morning Note – 14 January 2022

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PHILLIP SUMMARY

Asian stocks are poised to drop Friday after a raft of Federal Reserve officials signaled they will combat inflation aggressively and the Nasdaq 100 fell to its lowest level since October.

U.S. equity futures edged higher, but Australian equities sank at Friday’s open. Futures in Japan, China and Hong Kong declined. American stocks fell Thursday, led by technology companies — seen as most sensitive to higher rates — along with crude oil, copper and Bitcoin. Treasuries rose after last week’s violent rout.

Chipmakers overnight erased gains that were driven by Taiwan Semiconductor Manufacturing Co.’s growth projections, while Boeing Co. rallied as Bloomberg News reported the 737 Max is set to resume commercial flights in China as soon as this month.


BREAKING NEWS

SG

Catalist-listed Hatten Land announced that its subsidiary Hatten Edge has signed an agreement with SMI Vantage’s subsidiary SMI CS, which will allow the pilot phase of its first 50 sets of crypto mining rigs to commence operations by the end of this month. This is further linked to the memorandum of understanding that Hatten Land inked with mainboard-listed SMI Vantage in September 2021 to jointly explore business opportunities in crypto mining, the Malaysian property developer said in a bourse filing on Thursday (Jan 13). Despite pointing out in December that it is facing supply chain challenges, Hatten Land now says that it is on track to install and operate over 2,500 sets of crypto mining rigs within its properties in 2022. The agreement with SMI CS also comes after the group confirmed its first shipment of 80 crypto mining rigs with partner Frontier Digital Management on Tuesday.

Total securities market turnover value on the Singapore Exchange (SGX) fell 20 per cent on year in December 2021 to S$19.6 billion, while the securities daily average value was also down 23 per cent on year at S$852 million. However, the bourse saw an increase in demand for equity and commodity derivatives in the month, amid cautious optimism that the global economic recovery remained on track, SGX said in its monthly market statistics report on Thursday (Jan 13). Derivatives traded volume on SGX rose 5 per cent on year to 19.3 million contracts, the highest in 3 months.

Singapore Airlines (SIA) has priced US$600 million in fixed-rate notes due 2029, to be issued at 99.273 per cent of their principal amount on Jan 19. The Series 010 notes will bear a coupon of 3.375 per cent per annum until their maturity on Jan 19, 2029, the national carrier said in a bourse filing on Thursday (Jan 13). SIA said in a separate press statement that the bond was oversubscribed, with its order book exceeding US$1.2 billion. Inclusive of this notes issue, the group has raised around S$22.4 billion in additional liquidity since the start of the pandemic, it added.

Vertex Technology Acquisition Corporation (VTAC), a special purpose acquisition company (SPAC) established by Vertex Venture, has registered its final prospectus with the Monetary Authority of Singapore. VTAC is issuing 11.8 million units at an offer price of S$5 apiece, as stated previously in its preliminary prospectus. This offering will open at 8 pm on Thursday (Jan 13) and close at 12 pm on Jan 18. The trading of the units on the Singapore Exchange will then commence on a “ready” basis at 2 pm on Jan 20, sponsor Vertex Ventures said in a press statement on Thursday. The venture capital firm is backed by Singapore’s investment company Temasek.

The Port of Singapore saw a record high container throughput of 37.5 million twenty-foot equivalent units (TEUs) as it remained open in 2021. The year also saw Singapore handling 599.0 million tonnes of cargo. Vessel arrival reached 2.81 billion gross tonnage (GT). Bunker sales during the year also remained strong, maintaining Singapore’s position as the top bunkering port. In 2021, Singapore crossed 50 million tonnes for the second time in the port’s history.

US

The House select committee investigating the deadly Capitol riot has subpoenaed social media giants Twitter, Reddit and the parent companies of Facebook and Google, the panel’s chairman said Thursday. The bipartisan committee had asked for a trove of records last summer from those and other social companies, but said it received “inadequate responses” from some of the largest platforms. The committee again demanded that Google parent company Alphabet, Twitter, Reddit and Meta — formerly known as Facebook — hand over a slew of records related to domestic terrorism, the spread of misinformation and efforts to influence or overturn the 2020 election.

Delta Air Lines said Thursday that the surge of the Omicron variant of Covid-19 will drive it to a first-quarter loss, but that it still expects to turn a profit this year on stronger travel demand. CEO Ed Bastian said Omicron is expected to delay a rebound in air travel by about 60 days, forecasting losses for January and February and then profits in March. “The next four to six weeks are going to be difficult,” Bastian said in an interview Thursday on CNBC’s “Squawk Box.” “What we do see in the booking data is President’s weekend forward looks really robust. … People are ready to travel.”

Taiwan Semiconductor Manufacturing Co. raised its revenue growth projections and unveiled plans to spend as much as US$44 billion expanding in 2022, signalling confidence that voracious demand for iPhones and chips will persist for years. Apple Inc.’s most important chipmaker is now projecting average sales growth of 15% to 20% annually — as much as double its previous expectation. It foresees sales of US$16.6 billion to US$17.2 billion in the first quarter alone, at least 5% ahead of projections. Those numbers affirm TSMC’s pole position in the market during an unprecedented chip shortage triggered by the pandemic, a deficit that’s walloped the production of cars, mobile phones and game consoles. Asia’s most valuable corporation intends to continue spending heavily to maintain its technological lead over Intel Corp. to Samsung Electronics Co., safeguarding its market share as the growing number of connected devices like cars drive datacenters and high-end computing.

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

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