Daily Morning Note – 17 November 2021
Asian stocks looked set for a steady start Wednesday as traders weigh a climb in Wall Street shares, Treasury yields and the dollar amid robust U.S. economic data and more calls for tighter monetary policy.
Futures for Japan rose, while Hong Kong’s dipped. Australia slipped at the open. U.S. futures fluctuated after equities extended their rally overnight, buoyed by robust retail sales and factory output and generally solid reports from Walmart Inc. and Home Depot Inc. But concerns linger that high inflation could eventually bite, and Federal Reserve Bank of St. Louis President James Bullard called for more hawkish monetary policy.
Property developer City Developments Limited (CDL) has sold S$2.5 billion worth of units in the first nine months of the year, surpassing the amount it sold for the whole of 2020, the mainboard-listed company said on Tuesday (Nov 16). The group and its joint-venture (JV) associates sold 414 units with a total sales value of S$784.4 million in the third quarter. Its operational update indicates that this brought its sales performance in the nine months ended Sep 30 to S$2.5 billion with 1,382 units sold. Its year-to-date performance represents a 30 per cent increase in units sold, as well as a 76 per cent increase in total sales value, compared with the same period last year.
Chocolate confectionery company Delfi posted earnings before interest, taxes, depreciation and amortisation (Ebitda) of US$6.4 million for the third quarter ended September, up 20.8 per cent from Ebitda of US$5.3 million in the corresponding period last year. In a bourse filing on Tuesday (Nov 16), Delfi said the growth was due to higher gross profit margin and tighter control on operating expenses. Gross profit margin rose 2.8 percentage points to 27 per cent in Q3, from 24.2 per cent a year ago.
Singapore-based Sea, which owns e-commerce platform Shopee and game developer Garena, reported on Tuesday a third-quarter net loss attributable to ordinary shareholders of US$568.9 million, widening from US$420 million a year ago. Revenue however rose 121.8 per cent to US$2.7 billion for the three months ended Sep 30. Gross profit increased 147.5 per cent to US$1 billion. Loss per share was US$1.056, compared with US$0.855 a year ago, missing an estimate of US$0.803 based on a Bloomberg poll of 4 analysts.
Singapore Airlines has invested some S$230 million in the development, design and installation of new cabin products for its fleet of Boeing 737-8 aircraft, which will progressively return to service after the aircraft model was grounded for over 2 years due to 2 fatal accidents. SIA announced on Tuesday (Nov 16) that 6 of its 737-8 aircraft have been retrofitted with the latest cabin products and will gradually enter into service on short to medium-haul flights across the airline’s network in the coming weeks. This includes services to points in Brunei, Cambodia, Indonesia, Malaysia, Maldives, Nepal, and Thailand, subject to regulatory approvals. Another 31 Boeing 737-8s are due to join SIA and will be delivered progressively.
Keppel Corporation on Tuesday (Nov 16) reiterated that its offer for Singapore Press Holdings (SPH) is “firm and irrevocable” and also provides the shortest time to pay-out by mid-January 2022 for SPH shareholders. Keppel’s statement comes one day after the consortium comprising Hotel Properties (HPL), businessman Ong Beng Seng, and two Temasek-linked entities, CLA and Mapletree raised its offer for SPH. Keppel had days before, raised its bid too. Cuscaden Peak is now offering each SPH shareholder the option of an all-cash offer of S$2.36, or S$2.40 per share comprising S$1.602 cash and 0.782 of an SPH Reit unit through a distribution-in-specie by SPH.
Walmart’s fiscal third-quarter earnings on Tuesday topped analysts’ expectations as price-sensitive grocery shoppers flocked to its stores amid rising costs for household staples. The retailer’s size is helping it manage through snarled supply chains, as it negotiates with manufacturers, bulks up its inventory and charters its own ships to move goods across the globe. Walmart raised its forecast for the year, saying adjusted earnings per share will be around $6.40 versus its prior expectations of between $6.20 and $6.35. Shares are up less than 1% in premarket trading.
Google will spend A$1 billion ($736 million) in Australia over five years, the tech giant said on Tuesday, just months after it threatened to pull its services from the country in response to tougher government regulation. The main operating unit of Alphabet said it planned to expand cloud infrastructure, set up a research hub staffed by Australian researchers and engineers and partner with science agency the Commonwealth Scientific and Industrial Research Organisation (CSIRO). Google Australia Managing Director Mel Silva, who earlier this year threatened to block Google’s search engine in the country, said the spending plan would bring significant technology resources and investment.
Qualcomm Inc on Tuesday said that German automaker BMW will use its chips in its next generation of driver-assistance and self-driving systems. San Diego-based Qualcomm is the world’s biggest supplier of chips for mobile phones but has been diversifying its business, with more than a third of its chip sales coming from sources other than handsets. Qualcomm’s announcement of the BMW win came before an investor presentation where it was expected to give new details about its strategy. A spokesperson for BMW said that the new chips would be used for its ‘Neue Klasse’ series of cars, set to begin production from 2025.
JP Morgan Chase filed suit against electric vehicle maker Tesla in a dispute over warrants, according to court filings out Monday. The bank is seeking $162.2 million plus interest, attorneys’ fees and expenses. JP Morgan alleges that Tesla has breached the terms of a contract that the companies signed pertaining to re-pricing the warrants. Tesla was supposed to deliver shares, or cash, if its share price went above a contractually set “strike price” by a certain expiration date, the complaint says.
Lucid Group jumped by more than 5% during afterhours trading before retreating to about even after reporting its first quarterly financial results as a public company. The electric vehicle start-up announced a notable increase in vehicle reservations and confirmed its production target for next year, while reporting a net loss of $524.4 million in the third quarter. Lucid, which went public via a SPAC deal in July, reported it has lost $1.5 billion through the first nine months of the year.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Recommended: Technical BUY; Analyst: Chua Wei Ren
Oracle Corp (US: ORCL) report dated 2nd of June is still ongoing after recent technical indicate a strong bullish continuation
Buy spot: 95.61 Stop loss: 90.00 Take profit 1: 102.34 Take profit 2: 110.41
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