DAILY MORNING NOTE | 16 May 2023

SINGAPORE shares finished modestly higher on Monday (May 15), as investors stayed on the sidelines ahead of further data signals on China’s recovery and the uncertainty over the US debt ceiling stand-off. SINGAPORE shares edged higher 6.17 points or 0.2 per cent to 3,214.72, as caution remained thick in the air following last Friday’s losses on Wall Street. Key gauges across the region were mixed, with gains in Japan, Hong Kong, China, South Korea and Australia, and losses in Malaysia and Taiwan.

WALL Street stocks edged higher on Monday (May 15) as regional bank shares advanced while markets kept watch on key negotiations in Washington on extending the US debt ceiling limit. The Dow Jones Industrial Average finished up 0.1 per cent at 33,348.60.The broad-based S&P 500 gained 0.4 per cent to 4,136.28, while the tech-rich Nasdaq Composite Index jumped 0.7 per cent to 12,365.21.

SG

ComfortDelGro on Monday (May 15) posted earnings of S$32.8 million for its first fiscal quarter of 2023 ended March, down 56.9 per cent from its net profit of S$76.1 million in the corresponding year-ago period. The company’s revenue inched up 2.1 per cent to S$906.4 million from S$887.5 million, while operating profit on a year-on-year basis was down 51.6 per cent to S$50.9 million.

Singapore Airlines (SIA) and its budget arm Scoot flew close to 2.7 million passengers in April 2023, an 85.5 per cent increase from the same month a year ago, when borders in Singapore were fully reopened for the first time since the Covid-19 pandemic hit. But the pace of recovery appears to have slowed with base effects wearing off, since quarantine-free travel resumed on Apr 1, 2022. There was a 205 per cent jump in passenger numbers to 2.7 million in March; and for February, the surge was 338 per cent to 2.4 million.

Cromwell E-Reit on Monday (May 15) posted an indicative distribution per unit (DPU) of 3.90 euro cents for the first quarter ended Mar 31, 2023, down 5.8 per cent from 4.14 euro cents in the year-ago period. Including divestment gains in lieu of rent for two properties vacated for redevelopment, the Reit’s indicative DPU is 4.12 euro cents, a 2.4 per cent drop compared to 4.22 euro cents in the previous corresponding period, the manager said. Gross revenue was up 4.2 per cent year on year, from 52.6 million euros (S$76.4 million) to 54.8 million euros. NPI was up 3.6 per cent, from 32.5 million euros to 33.7 million euros, over the same time period.

Sats announced that Craig Smyth was slated to leave the organisation, and “new direct reporting lines” had been given to Sats’ chief executive officer, Kerry Mok. Sats was updating investors on the completion of its Paris-based WFS’ takeover for an enterprise value of about 2.3 billion euros (S$3.3 billion). Updating on its strategy without Smyth’s leadership would also help to allay any concerns of shareholders, who have supported the nearly S$800 million rights issue after a plunge in Sats’ share price.

SP Group and Saigon Beer Alcohol Beverage Corporation (Sabeco), a beer manufacturer and distributor in Vietnam have inked a partnership to install rooftop solar panels in nine breweries operated by Sabeco in Vietnam. The project is slated to be completed and operational by the third quarter this year, and will provide close to 25 per cent of electricity consumed at the factories. The project is expected to deliver over 14,600 MWh of electricity per year, enough to power about 4,082 households in Vietnam.

US

US yields rose on Friday and Monday, after a University of Michigan survey of consumers’ long-term inflation expectations jumped to the highest since 2011. That put a possible Fed rate hike next month back in play, with traders laying down those odds at 17 per cent. Many investors expect the US dollar to continue to decline in the coming months as inflation cools and the Fed pauses its rate hikes.

A FEDERAL appeals court on Monday (May 15) rejected Elon Musk’s bid to modify or end his 2018 securities fraud settlement with the US Securities and Exchange Commission (SEC) that required a Tesla lawyer to approve some of his tweets in advance. Musk’s decree resolved an SEC lawsuit accusing him of defrauding investors with an Aug 7, 2018, tweet that he had “funding secured” to take his electric car company private. Musk bought Twitter for US$44 billion in October and runs rocket and spacecraft manufacturer SpaceX. He is the world’s second-richest person, according to Forbes magazine. In February, a San Francisco jury found Musk not liable for investor losses over his “funding secured” tweet.

Newcrest said on Monday it had agreed to a takeover by US rival Newmont, creating a world-leading gold producer in a deal worth A$28.8 billion (S$25.43 billion). By swallowing up Newcrest, the US mining group expands its large gold and copper mining assets, giving it a global reach across North and South America, Africa, Australia and Papua New Guinea. Newcrest had recommended the takeover offer “unanimously”, he said, three months after its board rejected an earlier US$17 billion approach for not providing “sufficient value” to shareholders.

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

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