DAILY MORNING NOTE | 21 June 2023

Singapore stocks ended 0.7 per cent lower on Tuesday (Jun 20), led by a decline in Sembcorp Industries and Keppel Corporation the day after the Energy Market Authority (EMA) said it will introduce a temporary price cap on wholesale electricity prices. At the close, Sembcorp Industries lost 9.2 per cent or S$0.52 to S$5.15, with 24.4 million shares worth S$127.5 million having changed hands. Keppel Corp ended 5.2 per cent or S$0.36 lower at S$6.60, after eight million shares worth S$53.5 million changed hands.

Wall Street stocks retreated on Tuesday (Jun 20), giving back a fraction of the gains from recent weeks. Major indices spent most of the day in the red, finishing modestly lower. The Dow Jones Industrial Average shed 0.7 per cent to 34,054.07. The broad-based S&P 500 dipped 0.5 per cent to 4,388.73, while the tech-rich Nasdaq Composite Index lost 0.2 per cent at 13,667.29.

***We are ceasing coverage of Del Monte Pacific Ltd and First Sponsor Group Ltd with immediate effect due to a reallocation of resources. The previous recommendation can no longer be relied upon.***

SG

Keppel Corporation has been awarded a contract by the Urban Redevelopment Authority (URA) to design, build, own and operate a new large-scale district cooling system (DCS) plant for 30 years located in the Jurong Lake District (JLD). The contract is expected to generate about $950 million for Keppel, comprising payments from real estate developers, owners and occupants for the design and building of the DCS, as well as the supply of chilled water and operations and maintenance of the DCS over 30 years. The DCS will have a design capacity of 29,000 Refrigeration Tonnes (RT) to supply chilled water and related services to an estimated 1.4 million square metre gross floor area (sqm GFA).

Digital Life Line, a privately held associate company of catalist-listed Disa (Digital Safety) has signed a tri-party licensing agreement with the National University Hospital (NUH) and National University of Singapore (NUS) on June 19 to commercialise the Automated Visual Acuity Test device (AVAT), which measures eyes’ ability to distinguish shapes at a distance and Smart, User-friendly Portable Reliable Automated perimetry device (SUPRA), which tests visual fields. The technology was developed at a unit of NUS’ Medicine faculty, and refined after testing in the clinical setting at NUH. These are portable devices that are able to “decentralise” the current care model of conducting eye screening and monitoring of eye diseases.

Valuemax Group launched on Tuesday (Jun 20) an issue of unsecured commercial paper in digital securities at an interest rate of 5.15 per cent with a maturity of three months. The mainboard-listed group, offering pawnbroking and secured moneylending services, and engaging in the retail and trading of jewellery and gold, said in a bourse filing on Tuesday that it expects to raise S$10 million to S$20 million from accredited and institutional investors from the issuance, to be listed on the SDAX digital platform. The issuance is part of a S$100 million multi-series unsecured commercial paper facility programme launched by ValueMax on the digital platform on Tuesday.

Q&M Dental Group has agreed to transfer its 80% beneficial stake in Shanghai Chuangyi Investment & Management Co., Ltd. to Shanghai Zhibao Investment Consulting Co., Ltd for a consideration of RMB500,000 ($93,533.38). Shanghai Q&M Management & Consulting Co., Ltd., through which Q&M owns its stake in Shanghai Chuangyi, entered into a transfer agreement with Wong Kee Hau, Wu Jun and Shanghai Zhibao Investment Consulting on June 19. Q&M has also entered into a settlement and termination deed with Wong and Wu on June 19 where all parties have agreed to a full and final settlement of any disputes, claims and counter claims between the parties. The disputes were in relation to the breach of a non-competition agreement (NCA) that was entered into by Aoxin Q & M Dental Group Limited (Aoxin), Wong, Wu and Wu Jian on Nov 26, 2012. The benefit of the NCA was subsequently assigned to Q&M on Feb 18, 2021 through a deed of assignment between Aoxin and itself.

US

Chinese tech giant Alibaba said on Tuesday (Jun 20) that it will replace its top boss, in a surprise move at the e-commerce titan as it looks to recover from years of slow growth caused by weak consumer spending and a regulatory crackdown. Under the reshuffle, Joseph Tsai will serve as chairman and Eddie Wu as CEO – replacing Daniel Zhang, who holds both roles. Both appointments will take effect on Sep 10. After the transition, Zhang will continue to serve as chairman and CEO of Alibaba Cloud Intelligence Group, the company said.

Nasdaq-listed Grab Holdings, under pressure to turn around, is cutting 1,000 jobs, equivalent to 11% of its headcount, citing a memo sent by CEO Anthony Tan. The cuts, the biggest since the start of the pandemic, were not “a shortcut to profitability” but a strategic reorganisation to adapt to the business environment, says Tan. Tan maintains that even without the retrenchments, the company is on track to hit its target for adjusted EBITDA breakeven this year. For its 1QFY2023, Grab’s revenue increased by 130.3% y-o-y to US$525 million but remains in the red to the tune of US$250 million.

Eli Lilly will buy Dice Therapeutics for about US$2.4 billion in cash, the company said on Tuesday (Jun 20), bolstering its immune disease-related portfolio with an experimental pill to treat psoriasis. The company has been looking to bulk up its immunology pipeline, even as it bets on potential blockbuster obesity drug tirzepatide, also known as Mounjaro, to drive future growth. The deal helps Lilly gain Dice’s lead drug, DC-806, an oral pill being tested in a mid-stage trial to treat skin condition psoriasis.

UBS Group faces hundreds of millions of dollars in penalties following investigations by several regulators into Credit Suisse’s dealings with Archegos Capital. The bank had asked Switzerland’s financial regulator Finma, the US Federal Reserve and the UK’s Prudential Regulation Authority to publish their findings and announce any penalties jointly at the end of next month, citing four people briefed on the plans. The Fed’s fine over Archegos may be as high as US$300 million, while the PRA could slap a penalty of up to US$128 million, while the final number could be lower. Finma doesn’t have the authority to impose fines.

European antitrust regulators are preparing to launch a formal investigation into software giant Adobe’s $20 billion buyout deal for cloud-based designer platform Figma later this year. Adobe is in the preliminary phase of the regulatory process and having constructive discussions with British, EU, and U.S. regulators about the deal while Figma looks forward to continued conversations with regulators, the companies said in separate emailed statements.

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

RESEARCH REPORTS

PSR Stocks Coverage

For more information, please visit:

https://www.stocksbnb.com/singapore-stocks-coverage/