DAILY MORNING NOTE | 14 July 2023

Trade of the Day

Genting Singapore Ltd (SGX: G13)

Analyst: Zane Aw

(Current Price: S$0.945) – TECHNICAL BUY
Buy stop price: S$0.955 Stop loss: S$0.925 Take profit: S$1.04

Singapore shares rallied as cheers swept across the region on Thursday (Jul 13) following a softer US inflation print that sparked hopes Federal Reserve rate hikes could end soon. Singapore stocks surged 63.1 points or 2 per cent to 3,238.46. On the local bourse, some 2.1 billion securities worth S$1.5 billion were traded. Gainers trounced losers, with 407 counters up and 242 down.

Wall Street stocks rose for a fourth straight session on Thursday (Jul 13), lifting the S&P 500 to a fresh 15-month peak on the back of benign inflation data and good corporate earnings. Wholesale prices, measured through the producer price index, ticked up by 0.1 per cent last month, slightly less than expected. The broad-based S&P 500 ended at 4,510.04, up 0.9 per cent and logging its highest close since Apr 5, 2022. The Dow Jones Industrial Average added 0.1 per cent at 34,395.14, while the tech-rich Nasdaq Composite Index jumped 1.6 per cent to 14,138.57.

SG

The Registrar of Singapore’s Supreme Court on Thursday (Jul 13) fixed the hearing for the contended Sabana real estate investment trust (Sabana Reit) extraordinary general meeting (EGM) for 10 am on Jul 19. This was on an expedited basis. Activist investor Quarz Capital had requisitioned an EGM to remove Sabana Real Estate Investment Management as manager of Sabana Reit, in favour of an internal manager. In its originating application, ESR Group, the sponsor of Sabana Reit and ultimate owner of the Reit’s manager, sought to have the requisition rendered “invalid and/or ineffectual”.

Catalist-listed ICP will not proceed with its proposed placement of about 570.8 million shares at S$0.00876 apiece, for an approximate consideration of up to S$5 million, it announced on Thursday (Jul 13). This follows the mandatory conditional cash offer by controlling shareholder Aw Cheok Huat on Jul 11 to acquire all the issued and paid-up ordinary shares of the company at S$0.007 per share. The general offer constitutes a material adverse change which is likely to make it impracticable or inadvisable to market the placement shares or to enforce contracts for their purchase, the placement agent told ICP on Jul 12. It will likely also prejudice materially the success of the proposed placement. The counter closed at S$0.008 on Thursday, up S$0.001 or 14.3 per cent.

IReit Global has received a total of 250.7 million valid acceptances and excess applications, or 134.7 per cent of the total number of preferential offering units available, at the close of its offering on Jul 11. Valid acceptances came to 77.3 per cent. In a bourse filing on Thursday (Jul 13), the manager said that it received valid acceptances of 143.9 million new units and excess applications of 106.9 million units. A total of about 186.1 million preferential offering units will be issued to raise gross proceeds of S$75.9 million. The excess applications totalled 57.4 per cent of the amount on offer. The balance of 42.2 million preferential offering units that were not validly accepted will be allotted to satisfy excess applications.

US

Oil prices rose over 1 per cent on Thursday (Jul 13) to their highest in nearly three months after US inflation data suggested interest rates in the world’s biggest economy were close to their peak. Brent crude futures rose US$1.25, or 1.6 per cent, to settle at US$81.36 per barrel. The session peak was US$81.57, the highest since Apr 25. US West Texas Intermediate crude futures rose US$1.14, or 1.5 per cent, to US$76.89. The session high was US$77.13, the strongest since Apr 26.

The valuation of Elon Musk’s SpaceX hit near $150 billion following a share sale by existing investors announced this week, CNBC has learned. SpaceX has an agreement with new and existing investors to sell up to $750 million in stock from insiders at $81 a share, according to a copy of the purchase offer sent by CFO Bret Johnsen on Thursday, which CNBC obtained. The company did not announce a raise of new capital at this time, with the purchase offer representing a secondary sale of existing shares. Musk in April said that the company does “not anticipate needing to raise funding” to further bolster the programs for Starship, Starlink and other initiatives.

Shares of the insurance company fell about 11% after Progressive Corp reported results for June and the full second quarter. While the company swung from a loss to a profit compared with last year, its combined ratio was above 100 for both the quarter and the month, meaning its profits came largely from investment gains and not underwriting activity. Additionally, the company’s $14.72 billion in net premiums written for the quarter was below the $15.04 billion expected, according to StreetAccount.

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

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