DAILY MORNING NOTE | 27 June 2023

Trade of the Day

SoFi Technologies, Inc. (NASDAQ: SOFI)

Analyst: Zane Aw

(Current Price: US$8.28) – TECHNICAL BUY
Buy price: US$8.00 Stop loss: US$7.00
Take profit 1: US$10.00 Take profit 2: US$13.50

Singapore shares fell about 0.1 per cent or 1.92 points to close on Monday (Jun 26) at 3,189.68. Jardine Matheson Holdings was the top advancer by value on Monday, gaining 1.3 per cent or US$0.64 to close at US$51.09. Yangzijiang Shipbuilding also rose 5.5 per cent or S$0.07 on heavy trading to close at S$1.35. UOB was among the top losers for the day, falling 0.5 per cent or S$0.13 to S$27.86. Seatrium was the most heavily traded counter on Monday, with about 133.1 million shares changing hands. The counter closed flat at S$0.125. Other heavily traded stocks included Genting Singapore, Oceanus and Golden Agri-Resources.

Large tech shares stumbled Monday (Jun 26), weighing on major indices as markets eyed ongoing events in Russia and awaited key economic reports later in the week. Shares of Google parent Alphabet dropped 3.2 per cent while Tesla slumped 6.1 per cent. Others to fall included Amazon, Facebook parent Meta Platforms and Microsoft, leaving the tech-rich Nasdaq Composite Index down 1.2 per cent at 13,335.78. The Dow Jones Industrial Average shed less than 0.1 per cent to 33,714.71, while the broad-based S&P 500 fell 0.5 per cent to 4,328.82.

SG

Singapore’s manufacturing output contracted for an eighth straight month in May. The slump was deeper than expected, putting the economy at higher risk of a technical recession. Factory output in May fell 10.8 per cent from a year ago. This was after production fell a revised 6.5 per cent in April, according to data released by the Economic Development Board on Monday. On a seasonally adjusted month-on-month basis, output shrank 3.9 per cent. Electronics, which account for 45 per cent of Singapore’s export-driven manufacturing sector, was the worst performer, as output tumbled 23 per cent in May from a year ago. All other manufacturing clusters also saw output shrink year on year, with the exception of transport engineering and biomedical manufacturing.

AIMS Apac Reit has received valid acceptances and excess applications of 204.1 per cent of the total number of new units available at the close of its preferential offering on Jun 22. The manager said that it received valid acceptances of 17.5 million new units and excess applications of 34.2 million units. A total of 25.4 million new units will be issued to raise gross proceeds of S$30 million. The new units will be listed on the mainboard of the Singapore Exchange from 9 am on Jul 3.

StarHub has earmarked about S$50 million to repurchase up to 3 per cent of its issued share capital, or approximately 51.9 million shares. The company said the move is in line with the group’s Dare+ objective to enhance long-term total shareholder returns. StarHub noted that it expects to continue generating healthy cash flows, despite earlier guidance that FY2022 and FY2023 would be heavy investment years.

Sembcorp Industries’ indirect wholly-owned Indian subsidiary, Green Infra Wind Energy Limited (GIWEL), is in arbitration with its vendor, Siemens Gamesa Renewable Power, over issues and disputes from a composite supply contract and land and site development contract. Sembcorp said that following various defaults on the part of the vendor, GIWEL terminated the contract and filed a statement of claim against the vendor for 8.2 billion rupees (S$134.1 million) in the vendor’s FY2023. The vendor later filed its statement of defence and counterclaimed 19.6 billion rupees (S$321.7 million). Both Sembcorp and GIWEL believe that the vendor’s counterclaims lack merit. Sembcorp added that no provisions have been made, and the arbitration is not expected to have any material impact on Sembcorp’s earnings per share or net tangible assets per share for FY2023.

Yangzijiang Shipbuilding has secured a contract from Maersk to build six 9,000 twenty-foot equivalent unit capacity methanol dual-fuel container ships. The company said that this is the group’s first order win for this type of vessel. The six vessels will be fully constructed in-house for delivery between 2026 and 2027. The group said that it has secured new orders for 69 vessels worth approximately US$5.6 billion year-to-date, exceeding its US$3 billion target for 2023. Of the 69 vessels, new orders for 37 of those vessels were secured and announced on Apr 25, Jun 25 and Jun 26 this year. The group’s order book value stands at US$14.6 billion for 180 vessels.

Keppel Corporation will be providing so-called “energy-as-a-service” to the China-Singapore Guangzhou Knowledge City (CSGKC). The MOU for a strategic partnership was signed on June 26 between Keppel and China-Singapore Guangzhou Knowledge City Investment & Development Co, (GKC JV Co), developer of the “Knowledge City”. Under the strategic partnership, Keppel and GKC JV Co will explore the design and implementation, as well as operation and management of EaaS in CSGKC. These comprise energy-saving and management solutions, solar photovoltaic systems, thermal energy batteries, and EV charging stations in buildings and projects.

CapitaLand Group has unveiled the “Geneo” life sciences and innovation cluster, a redevelopment that is meant to help rejuvenate the 40-year-old Singapore Science Park (SSP). When fully completed in 2025 and operational, the development, costing $1.37 billion, will help bring SSP’s population to 21,000 from 12,000 now. The Geneo consists of three properties with five buildings, with a total GFA of 180,600 sqm. The project is owned by a 66:34 joint venture between CLD and CLAR.

Beng Kuang Marine will sell 100,970 square metres (sq m) of land in its Batam shipyard property for S$9.9 million, it said on Friday (Jun 23). This partial sale amounts to around a third, or 31 per cent, of the company’s 328,956 sq m waterfront fabrication yard land that it holds in Kabil, on the eastern side of Batam island. The sale price is also 68 per cent of Beng Kuang Marine’s market capitalisation of S$14.5 million. This is the second sales agreement inked for the shipyard property. The group will use up to S$5 million of the net proceeds from the sale to repay its bank and other borrowings. The remainder will be used for general working capital purposes. The land sale will also help the group reap substantial interest savings and lower depreciation expenses, as the company adopts an asset-light strategy, said Beng Kuang Marine.

US

Meta Platforms on Monday (Jun 26) launched Meta Quest+, a subscription-based service for its virtual reality (VR) headsets to shape a nascent but high-investment market. Chief executive Mark Zuckerberg said the Meta Quest+ subscription will be available from Monday at US$7.99 per month, or US$59.99 annually, for its Quest 2, Pro and soon for Quest 3.

IBM said on Monday (Jun 26) it will acquire cloud software company Apptio from Vista Equity Partners for US$4.6 billion in cash. IBM said it will finance the deal with cash on hand and expects the transaction to close in the latter half of 2023. Apptio helps companies manage and understand their spending on cloud services and offers functionalities such as IT budgeting, forecasting and financial analyses.

Ford Motor confirmed Monday it will carry out layoffs this week, primarily affecting engineering jobs in the U.S. and Canada. The job cuts are expected to affect all three of Ford’s business units: Ford Blue, its traditional internal combustion engine operations; Model e, its electric vehicle unit; and Ford Pro, its fleet service operations.

Oil prices rose slightly in choppy trading on Monday (Jun 26), as investors balanced concerns about global demand growth against upcoming supply disruptions that could be exacerbated by political instability in Russia. Brent crude futures rose 33 US cents, or 0.5 per cent, to settle at US$74.18 a barrel, while US West Texas Intermediate (WTI) futures rose 21 US cents, or 0.3 per cent, to settle at US$69.37 a barrel.

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

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