DAILY MORNING NOTE | 2 January 2024
Analyst: Zane Aw
– Review of performance in December – Airports of Thailand Public Co. and CP All Public Co. Ltd gained over 1 and 7% respectively. PTT Exploration & Production Public Co. Ltd extended its decline from November and was down over 1%
– For their current trends, Airports of Thailand Public Co. and CP All Public Co. Ltd are in a range consolidation while PTT Exploration & Production Public Co. Ltd is in a downtrend
– As we enter January, we are likely to see some consolidation for all 3 Thai listed SDRs. Amongst them, CP All Public Co. Ltd’s price structure is the strongest with a downtrend resistance line breakout in December while that of Airports of Thailand Public Co. is the weakest with a small range consolidation following a strong bearish selldown in November
Analyst: Zane Aw
– Review of asset classes performance in December – Most ETFs extended their gains from November and were up between 1 to 10%, with the ETF tracking Bitcoin (BITO) as the biggest gainer. However, ETF tracking Oil (XOP) was largely flat and ETF tracking Hang Seng Index (2828) was down over 1%
– For their current trends, S&P 500, US Treasury Bonds, Gold and Bitcoin remain in an uptrend. Singapore Equities are currently in a range consolidation while Oil and Hang Seng Index are in a downtrend
– As we head into January, some price consolidation is likely for most assets namely US Treasury Bonds, Bitcoin, Singapore Equities and Hang Seng Index. For S&P 500 and Gold, we are likely to see their respective bullish trends continue to create new highs. Meanwhile, the current bearish trend for Oil is likely to continue in the new year
Singapore shares ended the final trading session of the year on a high, as traders looked to capitalise on opportunities available in the capital markets. Singapore shares capped Friday (Dec 29) with a gain of 0.8 per cent or 25.87 points to close at 3,240.27. Across the broader market, gainers outpaced losers 370 to 202, after 1.4 billion securities worth a collective S$1.2 billion changed hands.
US stocks finished a banner 2023 on a tepid note Friday (Dec 29), falling modestly to trim the year’s huge gains. Major indices spent most of the final session of the year in the red, in a sharp reversal from the year’s trend, especially since late October. The broad-based S&P 500 dipped 0.3 per cent to 4,769.83, while the tech-rich Nasdaq Composite Index fell 0.6 percent to 15,011.35. Many of the gains accumulated since late October as market watchers cheered moderating inflation and a still-strong US labor market as indicating the US economy could avoid a recession.
Singapore’s economy grew 1.2 per cent in 2023, and is expected to grow by 1 to 3 per cent in 2024, but much will depend on the external environment, said Prime Minister Lee Hsien Loong on Sunday (Dec 31) evening in his annual New Year Message. The external environment will remain challenging not just in 2024 but for several years, he warned, even as he highlighted reasons for hope and reiterated the government’s commitment to care for its people.
Singapore is set to enter a phase of disinflation in 2024, after two years of rapid price increases in the wake of the Covid-19 pandemic. Economists are divided over how monetary policy will shape up, though, even as the central bank shifts to quarterly rather than half-yearly decisions. Core inflation, which excludes private transport and accommodation costs, is expected to cool to about 3 per cent in 2024.
Singapore’s real consumer spending is expected to grow of a slower pace 2.8 per cent next year, Mastercard Economics Institute (MEI) predicted. Amid inflationary pressures, consumer spending will rise at a slower pace in 2024, from a 3.5 per cent growth rate in 2023. Despite weakening consumers’ purchasing power, MEI expects Singapore’s economy to grow faster in real terms in 2024 by 2.7 per cent, up from 0.9 per cent in 2023, driven by a stablisation in external trade.
The US dollar edger higher on Friday (Dec 29) but was set to end 2023 with its first yearly loss since 2020 against the euro and a basket of currencies, on expectations that the US Federal Reserve will begin cutting rates in 2024 as inflation moderates. Questions for 2024 will be when the Fed begins cuts, and whether the first rate reduction is made to avoid over-tightening as inflation drops, or due to slowing US economic growth. With markets already pricing in aggressive cuts, debate is also focused on how much further the dollar is likely to fall.
Gold prices climbed to a three-week high on Thursday (Dec 28) as the US dollar and bond yields touched multi-month lows on mounting bets that the US central bank will start to cut interest rates as early as March next year. Spot gold was up 0.5 per cent at US$2,086.66 per ounce, hitting its highest since Dec 4, when prices raced to a record high of US$2,135.40. US gold futures rose 0.2 per cent to US$2,097.10 per ounce.
US chipmaker Nvidia on Thursday (Dec 28) launched a modified version of an advanced gaming chip designed to comply with US export controls targeting China. The chip, which the company says offers a quantum leap in performance, efficiency and artificial intelligence-driven graphics, will be available to Chinese customers starting in January. The GeForce RTX 4090 D has been designed to fully comply with US government export controls.
Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR
Analyst: Paul Chew
– Singapore’s equity market was down a muted 0.3% in 2023, clawing back the major outperformance and modest gains of 4% a year ago.
– As we enter 2024, economic growth is not robust. However, we are optimistic on Singapore equities and bonds as we enter a monetary easing cycle. The Fed is not only prepared to cut rates three times in 2024 but also cut them pre-emptively.
– Sectors we favour are REITs, conglomerates and telecommunications. In our model portfolio we added Valuetronics and China Aviation Oil.
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