Daily Morning Note – 21 January 2022

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PHILLIP SUMMARY

Singapore stocks rose along with other major regional indices on Thursday (Jan 20), with the Straits Times Index (STI) climbing 0.3 per cent, or 10.88 points to 3,294.82. Across the Singapore market, advancers beat decliners 251 to 210 after 1.03 billion worth S$1.03 billion changed hands.

Wall Street’s main indexes ended sharply lower on Thursday (Jan 20) and a rally in US stocks evaporated late in the session as investors considered whether equities were bargains after a sell-off to start the year that has seen the Nasdaq fall into correction territory. The Dow Jones Industrial Average fell 313.26 points, or 0.89 per cent, to 34,715.39, the S&P 500 lost 50.03 points, or 1.10 per cent to 4,482.73 and the Nasdaq Composite dropped 186.24 points, or 1.3 per cent, to 14,154.02. Of 11 major S&P 500 sectors, 10 finished lower, with the consumer discretionary sector falling 1.9 per cent. Utilities eked out a 0.1 per cent gain.

Stocks to watch: Joyas International Holdings


BREAKING NEWS

SG

Catalist-listed Joyas International Holdings plans to enter the non-fungible token (NFT) market through a tie-up with a company that already deals in NFTs and cryptocurrency. Joyas’ wholly owned subsidiary will hold 60 per cent of a new company that digitises artwork as NFTs with blockchain technology, its board said in a bourse filing on Thursday (Jan 20). The unit, Asiapac Growth Holdings, has entered into a joint cooperation agreement to set up the new company, Meta Technology International, with partner, Splendid Powerful. The deal is “a strategic opportunity for the group to venture into the fintech and NFT industry, in line with the group’s strategy of diversifying revenue streams, said the Joyas board.

Mainboard-listed Yangzijiang Shipbuilding (Holdings) is putting 900 million yuan (S$190.9 million) into an upcoming venture capital investment fund focused on sectors such as healthcare, technology and the green economy, the board announced on Thursday (Jan 20). Its subsidiary has entered into a limited partnership agreement with Tibet Gold Investment Management for a 90 per cent stake in the fund, which Tibet Gold manages as sole general partner. The fund, Wuxi Jinyu Yangchuan Venture Capital Investment Partnership (Limited Partnership), will extend seed capital in China’s Jiangsu province, with an operational term of 7 years. Jinyu Yangchuan, which is not yet operational, aims to invest in the healthcare, new materials, information technology services, smart manufacturing, new energy and ecological environment industries, said the bourse filing by Yangzijiang.

Units of Vertex Technology Acquisition Corporation (VTAC) closed at S$5.05, up 1.0 per cent, or S$0.05, above its initial public offering price of S$5 on its trading debut. The special purpose acquisition company (SPAC) saw some 1.69 million units changing hands on Thursday. This brings VTAC’s market capitalisation to about S$202 million. VTAC’s IPO of 11.8 million units consisted of a retail tranche of 600,000 units and an international placement of 11.2 million units. The retail tranche was 36 times subscribed, while the international placement was 8.8 times subscribed according to a press statement by VTAC on Jan 19. In addition, 13 cornerstone investors subscribed for 22.2 million cornerstone units separate from the offering. These cornerstone investors include Temasek-backed entities, Venezio Investments and Fullerton Fund Management.

US

Netflix dashed hopes for a quick rebound after forecasting weak first-quarter subscriber growth on Thursday (Jan 20), sending shares sinking nearly 20 per cent and wiping away most of its remaining pandemic-fuelled gains from 2020. Netflix projected it would add 2.5 million customers from January through March, less than half of the 5.9 million analysts had forecast. Netflix tempered its growth expectations, citing the late arrival of anticipated content, such as the second season of Bridgerton, and the film The Adam Project. The world’s largest streaming service added 8.3 million customers from October to December, when it released a heavy lineup of new programming including the star-studded movies Red Notice and Don’t Look Up and a new season of The Witcher. Industry analysts had projected Netflix would add 8.4 million, according to Refinitiv IBES data. The company’s global subscriber total reached 221.8 million at the end of 2021.

Alphabet‘s Google reported 27 per cent higher US lobbying expenditures for 2021 compared to 2020, spending US$9.6 million for the year, according to the Senate lobbying disclosure database. That’s far below the more than US$20 million it spent in 2018 but more than the US$7.53 million that went to lobbying in 2020. Google spent US$2.2 million on lobbying in the fourth quarter of 2021. Google’s lobbying spend dipped in 2020 as it restructured its government relations teams. The biggest technology companies, including Amazon.com, Meta Platforms’ Facebook and Apple, have been under pressure in Congress over allegations they abused their outsized market power. A long list of bills have been introduced aimed at reining them in, but none have become law. One of the bills, which would stop the platforms from giving preference to their own businesses, passed the Senate Judiciary Committee on Thursday (Jan 20).

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, likely as a winter wave of Covid-19 infections disrupted business activity, which could constrain job growth this month. Initial claims for state unemployment benefits increased to a seasonally adjusted 286,000 for the week ended Jan 15 from 231,000 in the prior week, the Labor Department said on Thursday (Jan 20). Economists polled by Reuters had forecast 220,000 applications for the latest week. The United States is reporting an average of 732,245 new coronavirus infections a day, according to a Reuters analysis of official data, in a winter surge driven by the Omicron variant.

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

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