DAILY MORNING NOTE | 2 November 2023

Singapore stocks rose for the third consecutive day on Wednesday (Nov 1), in line with gains across most of the region, as investors awaited the outcome of the US Federal Reserve’s meeting. The Index rose 0.3 per cent or 9.03 points to close at 3,076.77. Key indices in Japan, South Korea, Australia, Shanghai and Taiwan also closed higher, rising between 0.1 and 2.4 per cent, following overnight gains on Wall Street.

WALL Street stocks rallied while the dollar pulled back against the yen as the Federal Reserve kept interest rates steady, opting against hiking for the second straight time. The Dow Jones Industrial Average advanced 0.7 per cent to 33,274.58.The broad-based S&P 500 climbed 1.1 per cent to 4,237.86, while the tech-rich Nasdaq Composite Index jumped 1.6 per cent to 13,061.47.

SG

Digital Core Reit said on Wednesday (Nov 1) that it has reached a definitive agreement to sell several Silicon Valley facilities for US$160 million to Brookfield Infrastructure Partners, under a series of agreements to resolve the bankruptcy of its second-largest customer. The Reit manager did not name the customer, but it was previously reported to be Cyxtera Technologies, a global colocation and interconnection provider, which filed for bankruptcy protection in June.

First Real Estate Investment Trust posted a 6.1 per cent drop in distribution per unit (DPU) for the third quarter to S$0.0062, from S$0.0066 in the same period last year. This brought DPU for the nine months ended Sep 30 to S$0.0186, down 6.1 per cent year on year from S$0.0198, the manager said in a business update on Wednesday (Nov 1).

Thomson Reuters reported higher-than-expected third-quarter profit as its biggest divisions serving legal, tax and accounting professionals performed well amid an “uncertain macro environment.” Total revenue rose 1 per cent in the quarter to US$1.59 billion.

Second Chance Properties posted a net profit of S$10.4 million for the second half of its financial year ended Aug 31, 2023, up 8.9 per cent from the S$9.6 million in the year-ago period. Revenue inched up marginally by 0.3 per cent year on year to S$27.1 million. Earnings per share stood at 1.13 cents in H2, from 1.04 cents in the prior year.

Great Eastern reported a 21 per cent increase in net profit to S$180.2 million for the third quarter ended September, compared to S$149.3 million in the same period last year. This came on the back of a 5 per cent increase in total weighted new sales to S$419.4 million, driven by Singapore sales due to new product launches, said the insurance arm of OCBC on Wednesday (Nov 1).

Parkway Life Real Estate Investment Trust’s distribution per unit (DPU) for the first nine months of the fiscal year came in at S$0.1099, up 2.8 per cent on the year from S$0.107.On Manager said this is inclusive of a third-quarter DPU of S$0.037, which will form part of the H2 distribution when the Reit announces its full-year results.

US

US construction spending increased in September, but momentum is slowing as the factory building boom fades. The Commerce Department said on Wednesday (Nov 1) that construction spending rose 0.4 per cent. Data for August was revised higher to show construction spending surging 1.0 per cent instead of rising 0.5 per cent as previously reported. Economists polled by Reuters had forecast construction spending climbing 0.4 per cent.

US MANUFACTURING contracted sharply in October after showing signs of improvement in prior months as new orders and employment slumped, likely reflecting strikes by the United Auto Workers (UAW) union against Detroit’s Big Three car makers. PMI dropped to 46.7 last month from 49.0 in September, which was the highest reading since November 2022.

Airbnb gave a disappointing outlook for the fourth quarter, citing “greater volatility” in the economic environment that it expects will slow demand for travel after a record summer season.Revenue for the three months ending in December will be US$2.13 billion to US$2.17 billion, falling short of analysts’ average estimate of US$2.18 billion. Airbnb expects the pace of growth in nights booked to “moderate” relative to the third quarter.

PayPal earnings for the third quarter rose 20% to $1.30 per share on an adjusted basis. Revenue climbed 8% to $7.4 billion. Total payment volume processed from merchant customers in the quarter climbed 15% to $387.7 billion. Earnings guidance for PYPL stock for the fourth quarter came in below expectations amid expected higher investments by a new chief executive.

Qualcomm reported fourth-quarter earnings on Wednesday that beat expectations for sales and earnings, despite big year-over-year declines, and gave a strong forecast for the current quarter. Net income during the quarter was $1.49 billion or $1.32 per share, a 48% decrease from last year’s $2.87 billion or $2.54 per share.

Walt Disney expects to pay at least US$8.61 billion to buy Comcast’s one-third of the Hulu streaming service. Under a previous deal between the companies, the total value of Hulu will be no less than US$27.5 billion, minus any capital contributions payable by Comcast to Disney.

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

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