DAILY MORNING NOTE | 22 August 2023

Singapore stocks declined on Monday (Aug 21) amid mixed regional indices. Losers outnumbered gainers 359 to 255 as 1.3 billion securities worth S$1 billion changed hands. Singapore stocks fell 0.6 per cent or 19.9 points to 3,154.03. Japan’s Nikkei 225 gained 0.4 per cent, South Korea’s Kospi Composite Index rose 0.2 per cent, and the FTSE Bursa Malaysia KLCI was up 0.3 per cent. However, Hong Kong’s Hang Seng Index slipped 1.8 per cent, as China slashed its one-year loan prime rate, but kept its five-year rate unchanged.

The Nasdaq Composite snapped a four-day losing streak on Monday, even as Treasury yields reached levels not seen in over a decade. The tech-heavy index gained 1.6% to close at 13,497.59, its biggest one-day advance since July 28, when it rallied 1.9%. The S&P 500 gained 0.69% to close at 4,399.77. The Dow Jones Industrial Average fell 0.11% to 34,463.69.

SG

NoonTalk Media sank into the red in its fiscal second half from the year before, on a 60.6 per cent drop in revenue from its main business segment, production. The Catalist-listed media entertainment company is led by Singaporean actor, TV host and radio DJ Dasmond Koh. Its latest financial statement, released on Monday (Aug 21), showed that the production segment made S$1.2 million in the six months ended Jun 30, 2023, versus S$3 million in the corresponding half-year period a year ago. As a result, the company’s H2 net loss stood at S$1.1 million, reversing a net profit of S$734,377. The results translate to loss per share of 0.57 Singapore cent, versus earnings per share of 0.47 Singapore cent.

The voluntary conditional general offer made by Milkyway Chemical to take over LHN Logistics has been declared unconditional in all respects. As at 6pm on Monday (Aug 21), the total number of shares owned, controlled, acquired or agreed to be acquired by the offeror amounted to 90.6 per cent of the total number of issues shares of LHN Logistics, meeting the minimum acceptance condition of the offer. As a result, the closing date of the offer has been extended to Sep 27 from Sep 13. As the offeror has received valid acceptances of not less than 90 per cent of the total number of issued shares, it also intends to exercise its right of compulsory acquisition, according to a bourse filing on Monday. Following that, the offeror will delist LHN Logistics from the Catalist board of the Singapore Exchange (SGX).

The Singapore Exchange Regulation (SGX RegCo) issued a “trade with caution” alert for Dasin Retail Trust on Monday (Aug 21), as its trading activity review revealed that an individual seemed to be buying units of the China retail property trust to maintain the price. SGX RegCo said the trust’s closing price had stayed in the S$0.089 to S$0.094 range between Jul 17 and Aug 17 – the period this individual was buying the units. The individual was not named, but SGX RegCo said that its initial findings suggest that he or she is connected to Dasin. SGX RegCo said this individual’s purchasing activity was “particularly unusual and aggressive”, following negative announcements by Dasin on Aug 11 and Aug 14 regarding two notices of demand it had received.

Mainboard-listed media company mm2 Asia, which acquired 100 per cent stake in Cathay Cineplexes in 2017, is shutting a third cinema complex under the brand in less than a year – this time, the one at Parkway Parade. In a Facebook post on Monday (Aug 21), Cathay Cineplexes announced that Aug 27 will be the last day of operations for the branch in the major suburban mall in Marine Parade, while assuring that all other of its cineplexes will remain open as usual. This comes after the company ceased operations at the iconic The Cathay building on Handy Road on Jun 26, 2022, and Cathay Cineleisure Orchard on Grange Road on Jun 30, 2023.

US

Zoom shares rose as much as 8% in extended trading on Monday after the video-calling software provider announced fiscal second-quarter results that exceeded analysts’ expectations. Zoom’s revenue grew 3.6% year over year in the quarter that ended on July 31, according to a statement. Net income jumped to $182 million, or 59 cents per share, in the quarter, compared with $45.7 million, or 15 cents per share per share, in the fiscal second quarter one year ago. The company claimed around 218,100 enterprise customers at the end of July, up 1% from 215,900 as of April 30.

Arm, a computer chip company and unit of Japan’s SoftBank, filed preliminary papers on Monday for a public stock listing in New York, without releasing details on the size of the offering. The company, which is based in Britain, plans to list on the Nasdaq under the ticker “ARM”. US financial media have said the IPO will be the biggest of 2023. Arm plans a public offering of American depository shares, while the number of shares and the price range for the proposed offering have yet to be determined, the company said in a press release. Arm could hold a market valuation of at least US$60 billion. The company has nearly 6,000 employees. Arm had revenues of US$2.7 billion in 2023, roughly flat compared with last year.

Charles Schwab is planning to cut jobs and close or downsize offices to achieve at least US$500 million in annual cost savings as the brokerage responds to investor pressure. The company will close or cut down on some real estate and reduce employee headcount, Westlake, Texas-based Schwab said on Monday (Aug 21) in a regulatory filing. Schwab said it will incur costs of roughly US$400 million to US$500 million, “primarily related to employee compensation and benefits and facility exit costs”, as a result of the cuts.

Oil prices were steady on Monday with Brent staying above US$80 a barrel, as investors balanced tightening supply driven by Opec+ cuts with nagging concerns about global demand growth amid high interest rates. Brent crude dipped 8 cents to US$84.72 a barrel by 0033 GMT while US West Texas Intermediate crude was at US$81.28 a barrel, up 3 cents. The September WTI contract expires on Tuesday and the more active October contract eased 3 cents to US$80.63 a barrel. Both front-month benchmark prices snapped a 7-week winning streak last week to post a weekly loss of about 2 per cent after the US dollar strengthened on the possibility that interest rates could remain higher for longer while China’s worsening property crisis added to concerns about its sluggish economic growth and oil demand.

Gold prices steadied above 5-month lows on Monday after declining in the previous five sessions, as investors saddled up for central bankers’ gathering in Jackson Hole, Wyoming this week, for outlook on economy and interest rates. Spot gold was flat at US$1,888.36 per ounce by 0124 GMT, while US gold futures added 0.1 per cent to US$1,917.70. Prices dropped to their lowest since mid-March at US$1,883.70 last week, as buoyant economic data raised bets for higher-for-longer US interest rates, reducing demand for gold which does not yield any interest.

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

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