DAILY MORNING NOTE | 24 January 2024

Chinese Big 4 banks poised for a rebound

Analyst: Zane Aw

– The Chinese Big 4 banks have reached their respective support levels following a pullback and are poised for a rebound

– China Construction Bank and Industrial and Commercial Bank of China are likely to retest their respective downtrend channel resistances after pulling back to their channel supports coupled with double and triple bottom formations

– Bank of China is expected to resume its current uptrend from its uptrend channel support while Agricultural Bank of China is likely to rebound from its range support with further upside potential from a bullish cup and handle formation

Trades Initiated in the past week


Singapore stocks ended in the red on Tuesday (Jan 23), continuing their losing streak for the second day in a row. Their performance bucked the trend of regional bourses which mostly ended in the black. The index fell 0.4 per cent or 13.87 points to close at 3,135.25. Across the broader market, decliners outnumbered advancers 293 to 264 after 1.5 billion securities worth S$1.1 billion changed hands.

US stocks ended the day mixed on Tuesday (Jan 23), as corporate earnings results weighed on some companies and sent others surging. The Dow Jones Industrial Average fell rose 0.3 per cent to 37,905.45, snapping a three-day winning streak that pushed it to record highs on Monday. The broad-based S&P 500 closed up 0.3 per cent at 4,864.60, and the tech-heavy Nasdaq Composite Index gained 0.4 per cent to close the day at 15,425.94.

Top gainers & losers


Events Of The Week



Headline inflation last year was 4.8 per cent year on year, against MAS and MTI’s forecast of “around 5 per cent”. Similarly, 2023 full-year core inflation – which excludes accommodation and private transport – at 4.2 per cent was close to the official forecast of “around 4 per cent”. Headline inflation in 2022 averaged 6.1 per cent, while core inflation was 4.1 per cent.

Sabana Industrial Real Estate Investment Trust posted a distribution per unit (DPU) of S$0.0115 for the half-year ended Dec 31, 2023, down 21.2 per cent from the year-ago period. The sharp decline came as 10 per cent of total income available for distribution in FY2023 was retained for “prudent capital management”, in view of additional costs that would be incurred during the internalisation of the Reit manager, according to a bourse filing on Tuesday (Jan 23).

Keppel has taken out sustainability-linked revolving credit facilities with DBS and UOB of S$500 million each, with tenures of up to three years, to be used to enhance the company’s sustainability performance. The asset manager said on Tuesday (Jan 23) that the loans come with “preferential interest margins which are tied to Keppel’s achievement of certain sustainability performance targets (SPTs), and would be stepped-up if Keppel does not achieve those SPTs”.

Metech International has received letters of demand from legal firm Setia Law for costs incurred over its dispute with another company, X Diamond Capital, and other parties, it disclosed in a bourse filing on Tuesday (Jan 23). On Jan 18, Metech received letters from Setia Law demanding payment of S$88,932.06 from the company, and S$138,380.66 from its subsidiary, Asian Eco Technology (AET). Payment is due within seven days of the date of the letters.


General Electric expects profit in its aerospace business to climb in 2024, highlighting the potential earnings power of the world’s largest jet-engine maker as it prepares to become a standalone business. GE Aerospace should produce as much as US$6.5 billion in operating profit this year, even as it takes on about US$600 million in costs as it becomes an independent company, GE said on Tuesday (Jan 23) in a statement announcing fourth-quarter results. That compares to about US$6.1 billion in operating profit generated by the jet-engine division in 2023.

Procter & Gamble cut its annual profit forecast on Tuesday (Jan 23) as the boost from earlier price hikes fades in the US and after writing down the value of its Gillette business in December. The company estimated it would record up to US$2.5 billion in charges over two fiscal years due to the Gillette business write down and restructuring of certain markets. Sales of its high-end SK-II skin-care brand fell 34% in the greater China region during its latest quarter — and it blamed an unlikely culprit.

Netflix reported fourth-quarter net income of $937.8 million, or $2.11 per share, versus $55.3 million, or 12 cents per share, in the prior-year period. The company posted revenue of $8.83 billion for the quarter, up from $7.85 billion in the year-ago quarter. As Netflix focuses on improving profits, the company increased its 2024 full-year operating margin forecast to 24%, up from a range of 22% to 23%. It cited the weakening of the U.S. dollar and a stronger-than-forecast fourth-quarter performance.

3M forecasted earnings adjusted for one-time items of $9.35 a share to $9.75 a share for 2024, compared with the consensus estimate of $9.82 a share. As for the fourth quarter, revenue was less than expected, falling less 1% from a year earlier to $7.69 billion, compared with the consensus estimate of $7.72 billion.

Johnson & Johnson on Tuesday reported fourth-quarter earnings and revenue that narrowly edged out Wall Street’s expectations as sales in the company’s pharmaceutical and medical devices businesses surged. J&J also provided full-year guidance for 2024, forecasting sales of $87.8 billion to $88.6 billion and adjusted earnings of $10.55 to $10.75 per share.

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


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