DAILY MORNING NOTE | 19 January 2024

Trades Initiated in the past week

Factsheets



Singapore shares inched down 0.1 per cent on Thursday (Jan 18). Yangzijiang Shipbuilding had a boost of 1.3 per cent in its share price to S$1.60, a day after it reported bagging an order to build six container ships but without stating the value of the deal. The China-based vessel maker was the second-most traded stock with about 25.4 million shares transacted while Seatrium was top with 143.9 million shares traded. Seatrium closed 0.9 per cent higher at S$0.114.

Stocks on Wall Street jumped on Thursday, with a rebound in tech propelling major indices into positive territory and snapping a recent losing streak. The tech-heavy Nasdaq Composite Index rose 1.4 per cent to 15,055.65, while the broad-based S&P 500 ended the day up 0.9 per cent at 4,780.94. And the Dow Jones Industrial Average closed the day 0.5 per cent higher at 37,468.61.

Top gainers & losers

Factsheets


Events Of The Week

Factsheets


SG

The cut-off yield on the latest Singapore six-month Treasury bill (T-bill) has fallen to 3.7 per cent, according to auction results released on Thursday (Jan 18). This was down from the 3.74 per cent offered in the previous six-month tranche, which closed on Jan 4. Demand for T-bills remained strong in the latest tranche. The latest issuance received S$13.6 billion in applications for the S$6.4 billion on offer, representing a bid-to-cover ratio of 2.12. In comparison, the previous issuance received S$12.8 billion in applications for the S$6.1 billion on offer.

Ever Glory United Holdings is proposing to acquire Fire-Guard Engineering, a specialist subcontractor for fire protection services, for a maximum aggregate consideration of about S$5.6 million. This would represent the group’s first acquisition since its listing in May 2023. The deal will be funded through a combination of the company’s internal resources as well as net proceeds from its initial public offering, announced the engineering service provider on Thursday (Jan 18). The maximum aggregate consideration comprises a base consideration of up to S$4.2 million, which will be payable in three tranches. In the second tranche, Ever Glory will issue 4.1 million shares at S$0.40 apiece, or S$1.7 million worth of shares in the company to Fire-Guard Engineering’s vendors. This issue price is subject to adjustment on May 3, 2024, in the event that S$0.40 should represent more than a 10 per cent discount to the counter’s volume weighted average price per share for the full market day before this date. Ever Glory said that if its share price falls below the issue price as at Jan 2, 2025, the company will issue additional consideration shares to Fire-Guard Engineering’s vendors, to address a shortfall in value of the second tranche’s consideration shares. Assuming that the maximum number of additional consideration shares are allotted and issued, this would result in a maximum aggregate consideration of about S$5.6 million for the deal.

One of the three illegal mortgages imposed on EC World Real Estate Investment Trust’s (EC World Reit) Chinese properties has been discharged by the government’s land regulation arm. This is based on a Real Estate Mortgage De-registration Certificate issued by the Hangzhou Bureau of Planning and Natural Resources, provided by the Reit’s sponsor Forchn Holdings Group, said the Reit manager on Thursday (Jan 18). The discharged mortgage was over Hengde Logistics, one of six Hangzhou properties owned by EC World Reit. The sponsor is said to be working on solutions to discharge the remaining two illegal mortgages on Fuzhou E-Commerce and Fu Heng Warehouse. The manager, EC World Asset Management, said it has verified and confirmed the accuracy of the information with its onshore security agent. All three illegal mortgages were imposed between Nov 20 and Nov 24 in 2023, in favour of two Fuyang government-linked entities in Hangzhou for loans of 268.6 million yuan (S$51.3 million) to the sponsor. The Reit manager said on Jan 2 that the sponsor had taken out the mortgages without its knowledge and consent. It only learnt about the illegal mortgages from its onshore security agent. Since Jan 5, the manager has taken control of the company and legal representative seals, as well as the contract and finance stamps from the property management teams in China. The sponsor updated unitholders on Jan 15 that a lapse in the approval process resulted in the illegality of the three mortgages.

Intraco has launched its third issue under the SDAX Commercial Paper Facility Programme (the SGD CP Series 003) for a tenor of 47 days at an interest rate of 4.4% per annum on Jan 18. The company says the issue raised S$4.19 million from accredited investors, with the tokens to be listed on the SDAX Exchange on the same day. Amongst the subscribers, S$1.2 million was subscribed by associates of Intraco’s controlling shareholders and S$200,000 was subscribed by the company’s executive chairman, amounting to approximately 33% of the SGD CP Series 003 Tokens.

Straits Trading on Thursday (Jan 18) said it will issue S$130 million notes due 2029 at 4.7 per cent. The notes, to be issued at par on Jan 24, fall under the investment company’s S$500 million multicurrency debt issuance programme established in 2011 and updated in 2017. Net proceeds from the issuance will be used for general corporate purposes, including financing existing borrowings, working capital and capital expenditure requirements, the company said.


US

The world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Company on Thursday posted better-than-expected profit and revenue on the back of weaker macroeconomic conditions. Revenue came in at 625.53 billion New Taiwan dollars (US$19.62 billion), vs. NT$618.31 billion expected while net income was NT$238.71 billion, vs. NT$225.22 billion expected. TSMC reported revenue slipped 1.5% from a year ago to NT$625.53 billion, while net income dropped 19.3% from a year ago to NT$238.71 billion. That compares with TSMC’s guidance for fourth-quarter revenue between US$18.8 billion and US$19.6 billion. “In the fourth quarter, revenue increased 14.4% sequentially from the third quarter, supported by the continued strong ramp of our industry-leading 3-nanometer technology,” said TSMC in its fourth-quarter earnings report. The company announced another delay to its US$40 billion site in Arizona, dealing a further blow to the Biden administration’s plans to boost manufacturing of critical components on US soil. Executives said their second plant in Arizona, whose shell is now being built, will start operations in 2027 or 2028, later than TSMC’s prior guidance of 2026. That’s after the company in July announced a delay to the first site, now due to start making 4-nanometer chips only in 2025, citing a lack of skilled labor and higher costs.

Boeing won an order for 150 MAX jets from India’s newest airline, in a rare spot of good news for the US planemaker since a piece of fuselage blew off an Alaska Airlines flight almost two weeks ago. Akasa Air, which began flying commercially less than two years ago, made a firm purchase for the 737 MAX 10 and MAX 8-200 planes to be delivered till 2032, the carrier announced at the Wings India air show on Thursday (Jan18). The order does not include the MAX 9 variant involved in the Jan 5 Alaska Airlines incident, when a door plug panel blew off shortly after take-off. Akasa’s total order book now stands at 226 aircraft, bolstering its domestic and international expansion plans, indicated the statement. The airline, which currently operates a fleet of 22 MAX jets, will “continue to rely primarily on sale and leaseback financing” for its new order, chief financial officer Ankur Goel said.

Netflix isn’t planning to launch an app for Apple Inc.’s upcoming Vision Pro headset, marking a high-profile snub of the new technology by the world’s biggest video subscription service. Rather than designing a Vision Pro app — or even just supporting its existing iPad app on the platform — Netflix is essentially taking a pass. The company, which competes with Apple in streaming, said in a statement that users interested in watching its content on the device can do so from the web.

Apple will remove the blood oxygen feature from its latest Apple Watches, a move that will allow the company to continue importing and selling the devices in the U.S. as it battles with Masimo in court. Modified versions of the Apple Watch Series 9 and Ultra 2 will go on sale Thursday, Apple said in a statement. Both devices were introduced in September. When a user taps on the blood oxygen icon on a modified watch, the display will show an alert directing the user to an explanation on Apple’s website, the company said.

Tesla China is to launch a nationwide tour to showcase its flagship Cybertruck pickup in its second-largest market, the company said on Chinese social media messaging site Wechat on Thursday (Jan 18). The US automaker did not give dates. Tesla CEO Elon Musk posted on the X platform on Sunday that the company could ship some prototypes of Cybertruck for display in China although it would be difficult to make the vehicle legal for the road. Unlike in the US, pickups have been a niche product in China where many city governments, including Beijing, do not allow them to enter downtown areas. Tesla does not open Cybertruck for order on its Chinese website.

Vietnamese electric vehicle (EV) maker VinFast on Thursday (Jan 18) said it delivered nearly 35,000 cars in 2023, below its target of at least 40,000 units, blaming slow EV adoption in some regions, tough competition and uncertain economy. The deliveries in the last three months of 2023, however, increased 35 per cent against the third quarter to 13,513 units, the company said. VinFast, which started to deliver its sport utility vehicle (SUV) VF eight in California last March, earlier this month flagged a plan to set up manufacturing and battery facilities in India. It also aims to expand in more markets in the Middle East, Latin America and Asia, including Indonesia.

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


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