DAILY MORNING NOTE | 23 February 2023
Singapore shares declined on Wednesday (Feb 22) along with major regional markets, after Wall Street saw its largest single-day fall in 2023 overnight. The Straits Times Index (STI) fell 0.2 per cent or 6.82 points to 3,300.04. Across the broader market, losers beat gainers 304 to 246 after 1.7 billion securities worth S$1.3 billion changed hands. Major Asian markets were in the red on Wednesday. Japan’s Nikkei 225 fell 1.3 per cent, Hong Kong’s Hang Seng Index shed 0.5 per cent and South Korea’s Kospi declined 1.7 per cent.
Wall Street stocks finished a choppy session mostly lower on Wednesday as markets assessed the significance of minutes from the last Federal Reserve meeting, which revealed that nearly all policy makers favoured a smaller interest rate hike. But since that Feb 1 meeting, January inflation and employment data have suggested that pricing pressures remain acute, stoking fears that the US central bank’s rate-hiking cycle could be prolonged. The Dow Jones Industrial Average ended down 0.3 per cent at 33,045.09. The broad-based S&P 500 shed 0.3 per cent to 3,991.05, while the tech-rich Nasdaq Composite Index added 0.1 per cent to 11,507.07.
Stocks to watch: UOB
UOB’s 4Q2022 results were slightly lower than expectations with normalised net profit of S$1.40bn vs our estimate of S$1.59bn. This was mainly due to net interest income growth of 53% YoY (S$2.56bn) and other income growth of 62% YoY (S$285mn) offset by net fee income dipping 16% YoY (485mn) and higher allowances of S$184mn (+65% YoY). 4Q22 dividend is up 25% YoY to 75 cents, total FY22 dividend at 135 cents (+13% YoY). More details to follow after the 10.15am analyst call.
Shares in Sats fell as much as 4.4 per cent on Wednesday (Feb 22) after the inflight caterer and ground handler said it will issue 363.1 million new shares at S$2.20 apiece to raise around S$798.8 million via a renounceable underwritten rights issue. The number of new shares to be issued represents around 32.3 per cent of all existing issued shares. The counter tumbled to a low of S$2.63 – down S$0.12 from its previous close of S$2.75 – after Sats called for the trading halt to be lifted around noon. It regained some composure to close at S$2.72 on Wednesday, down 1.1 per cent or S$0.03, after 10 million shares changed hands.
The certificate of entitlement (COE) price in the Open category hit a record high of S$118,001 in the tender exercise that closed on Wednesday (Feb 22). The commercial vehicle COE also set a new record price of S$87,790, and the premiums for all other categories went up. The price for Open COE at S$118,001 represents an increase of 12.4 per cent from S$105,002 in the last tender exercise. This breaks the record of S$116,577 set in November 2022.
Local public transport operator SBS Transit, a 75%-owned company of ComfortDelGro, announced that its FY2022 ended Dec 31, 2022, earnings have increased by 31.7% to $68.0 million from $51.6 million a year ago. This comes on the back of a 15.6% y-o-y increase in revenue to $1.5 billion from $1.3 billion last year, with revenue contribution from both public transport services and other commercial services seeing growth. Revenue from the public transport services business, which comprises bus and rail services, increased by 15.8% y-o-y to $1.5 billion. This was due mainly to higher fuel indexation from higher oil prices, and higher rail revenue from increased ridership.
Healthcare services provider TalkMed Group’s net profit for the second half (H2) rose 28.7 per cent, thanks to higher revenue from more oncology patient visits in Singapore. Net profit for the six months ended Dec 31, 2022 rose to S$18.4 million, from S$14.3 million in the corresponding period in 2021. This was mainly due to an improvement in patient numbers – who came from around the region – following the easing of pandemic measures in Singapore last year, TalkMed said in a regulatory filing on Wednesday (Feb 22).
Google Asia-Pacific will give up part of the space it leases at Frasers Logistics & Commercial Trust’s (FLCT) Alexandra Technopark property from Feb 20, 2024, the real estate investment trust (Reit) manager said in a filing on Wednesday (Feb 22). The manager said the tech giant has exercised its contractual right to surrender a portion of its premises that it leases. The premises to be surrendered constitutes approximately 1.7 per cent of FLCT’s gross rental income (GRI) for the month ended Dec 31, 2022.
The manager of United Hampshire US Real Estate Investment Trust (United Hampshire US Reit) on Wednesday (Feb 22) posted distribution per unit (DPU) of US$0.0297 for the second half ended Dec 31, 2022, down 2.6 per cent from DPU of US$0.0305 the previous year. Excluding one-off top-ups and stipulated damages, adjusted DPU for H2 FY2022 would have been 5.7 per cent higher than the previous year. The H2 DPU of US$0.0297 will be paid on Mar 31. Distributable income rose 5.2 per cent to US$16.8 million in H2, from US$16 million in the year-ago period.
Boustead Singapore will raise the offer price to take its mainboard-listed real estate subsidiary Boustead Projects private to S$0.95 per share from S$0.90 previously, with the revised offer price final, Boustead Singapore said in a bourse filing on Wednesday (Feb 22). The announcement comes after investor protests on undervaluation. In a letter to Boustead Singapore on Feb 16, the Securities Investors Association (Singapore) (Sias) called on the engineering services provider to raise its offer price, citing the discount to asset value then as “simply too large to ignore”.
Baidu announced a US$5 billion share buyback after reporting better-than-expected revenue, reflecting how its cloud computing service is offsetting an advertising lull during China’s economic downturn. Its shares gained 6 per cent in pre-market US trading. Sales slipped to 33.1 billion yuan (S$6.43 billion) for the three months ended December, compared with expectations for 32.1 billion yuan. Net income came in at almost 5 billion yuan during the quarter, when China made a U-turn on its Covid Zero policy that disrupted parts of the world’s No 2 economy.
Facebook-parent Meta Platforms is planning a fresh round of job cuts in a reorganisation and downsizing effort that could affect thousands of workers, the Washington Post reported on Wednesday (Feb 22). The company did not immediately respond to a Reuters request for comment. Last year, the social media giant said it will let go of 13 per cent of its workforce, or more than 11,000 employees, as it grappled with soaring costs and a weak advertising market.
Amazon.com says it has completed its purchase of One Medical parent 1Life Healthcare, sealing the US$3.49 billion acquisition after the US Federal Trade Commission (FTC) declined to challenge it. The deal gives the e-commerce giant a network of primary-care doctors, Amazon’s biggest move to date into the health care industry. One Medical operates more than 200 medical offices in 26 markets in the US. Customers pay a subscription fee for access to its physicians and digital health services.
Intel, the biggest maker of computer processors, slashed its dividend payment to the lowest level in 16 years to preserve cash and focus on a turnaround effort. The company will reduce it’s quarterly payout to investors to 12.5 cents a share for holders payable Jun 1, the chipmaker said in a statement on Wednesday (Feb 22). Intel’s current quarterly dividend is 36.5 cents and was projected to cost more than US$6 billion in 2023. The new payment resets Intel’s dividend to a level not seen since 2007.
Tesla has begun assembling batteries in Germany but will focus cell production in the US in light of Inflation Reduction Act tax incentives, a spokesperson said, one of the first firms to declare a strategy shift prompted by the package. The US electric-vehicle maker is also preparing to produce cell components such as electrodes, some of which will be sent from its site in Gruenheide in the state of Brandenburg, to the United States, the Tesla spokesperson said on Wednesday (Feb 22).
Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR
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