DAILY MORNING NOTE | 29 March 2023

Singapore shares advanced 0.5 per cent on Tuesday (Mar 28). Jardine Cycle & Carriage was the top advancer on Tuesday, gaining 1.1 per cent or S$0.33 to S$29.53. The trio of lenders were also among the biggest gainers, as local traders remained unfazed by the global banking crisis. UOB added 1 per cent or S$0.28 to S$29.76, DBS rose 0.5 per cent or S$0.16 to S$33.62, while OCBC advanced 1.1 per cent or S$0.14 to S$12.55. Venture Corporation was the biggest decliner for the day. The stock, which was trading on a cum-dividend basis, shed 0.6 per cent or S$0.10 to S$17.48.

Wall Street stocks finished lower Tuesday (Mar 28), shrugging off solid consumer confidence data as US Treasury bond yields climbed. The Dow Jones Industrial Average dipped 0.1 per cent to 32,394.25. The broad-based S&P 500 slipped 0.2 per cent to 3,971.27, while the tech-rich Nasdaq Composite Index lost 0.5 per cent at 11,716.08.

SG

Resale volumes of private condominiums rose for the first time since October 2022, driven by pent-up demand after the Chinese New Year period. Flash estimates from SRX and 99.co on Tuesday (Mar 28) showed that 756 units were resold in February 2023, a 50.3 per cent increase from the 503 units resold in January. However, sales volumes were still 4.2 per cent lower than they were in February 2022 and 4.1 per cent lower than the five-year average volumes for the month of February. SRX and 99.co note that overall condo resale prices rebounded in February, rising 1.4 per cent month on month. On a year-on-year basis, overall condo resale prices rose by 9.2 per cent

Temasek Holdings is considering a US initial public offering of Advanced MedTech Holdings after a planned sale of the medical device maker stalled, according to people with knowledge of the matter. The firm is working with advisers to explore a potential share sale that could raise US$200 million ($265.84 million) to US$300 million, said the people. A listing may take place as soon as next year, one of the people said.

Keppel DC REIT Management has priced EUR50 million ($71.97 million) worth of notes, or “Series 004 Notes” under its $2 billion Multicurrency Debt Issuance Programme. The notes will be issued at a price of 100% of the principal amount, and will be in denominations of EUR100,000 or higher denominations of EUR1,000. Interest on the notes will be payable quarterly. The notes will bear interest at the prevailing three-month Euro Interbank Offered Rate (EURIBOR) with respect to the relevant interest payment date plus an agreed spread. The notes will be issued on April 4, 2023, and will mature on April 4, 2030.

Keong Hong Construction, a wholly-owned unit of Keong Hong Holdings, has secured a S$118 million tender for main contract works at Cecil Street. The tender, awarded by Solitaire Cecil, involves the proposed erection of a 20-storey office building. The construction period is 35 months, commencing in May. The project is not expected to have any material impact on Keong Hong’s earnings per share for the year ending Sep 30.

Hyflux Membrane Manufacturing and Hyflux Engineering have been ordered on Tuesday (Mar 28) to be wound up upon a successful application by the now defunct water treatment firm Hyflux. Tan Kok Quan Partnership, representing Hyflux as the claimant in the winding-up applications, told the High Court that the two Hyflux subsidiaries have not been able to pay the debt it is seeking to recover. Justice Aedit Abdullah noted that no one opposed the petitions to wind up the two Hyflux companies.

US

Facebook owner Meta Platforms is planning to lower bonus pays for some employees, and assess staff performance more frequently. Employees of the social media giant, who get a rating of “met most expectations” in their 2023 year-end reviews, will receive a smaller percentage of bonus and restricted stock award due in March 2024. The bonus multiplier for that grade has been cut to 65 per cent from 85 per cent earlier, and the company will also restart assessing staff performance twice a year.

Alibaba Group Holding is planning to split its business into six main units covering e-commerce, media and the cloud, the company said on Tuesday (Mar 28), adding that each of the units will explore fundraising or initial public offerings. Each of the six will be managed by its own CEO and board of directors.

Micron Technology Inc on Tuesday announced second-quarter results. Revenue fell by about 53% to $3.69 billion and the company lost $2.3 billion, compared with a profit of $2.26 billion a year earlier. The company forecasts third-quarter revenue would tumble nearly 60% from a year earlier to $3.70 billion but the steep drop was in line with Wall Street expectations and company executives painted a rosy outlook for 2025 with artificial intelligence boosting sales. Micron expects to incur a loss of $1.58 per share, excluding items, in the current quarter compared with estimates of 90 cents per share.

Lululemon on Tuesday reported strong holiday-quarter sales. Revenue rose to $2.77 billion (vs $2.7 billion expected) from $2.13 billion a year ago. Fourth-quarter net income fell to $119.8 million from $434.5 million a year ago. Excluding impairment and other charges related to the acquisition of Mirror, as well as other items, EPS were $4.40 (vs $4.26 expected). The company expects fiscal 2023 revenue of between $9.3 billion and $9.41 billion, topping Wall Street’s expectations of $9.14 billion. Lululemon expects full-year profit of between $11.50 and $11.72 per share (vs estimates of $11.26 per share).

Lucid said in a regulatory filing on Tuesday that it plans to cut about 18% of its workforce, or roughly 1,300 employees, as part of a larger restructuring to reduce costs. Lucid said it will incur one-time charges totaling between $24 million and $30 million related to the job cuts, with most of that amount being recognized in the first quarter of 2023. CEO Peter Rawlinson said the job cuts will hit “nearly every organization and level, including executives,” and that affected employees will be notified over the next three days.

Apple on Tuesday introduced Apple Pay Later, which will allow users to split purchases into four payments spread over the course of six weeks. Individuals can apply for Apple Pay Later loans of between $50 and $1,000 and use them for in-app and online purchases made through merchants that accept Apple Pay. Payments have no interest and no fees. Users will be asked to link a debit card as their loan repayment method. Credit cards won’t be accepted.

Microsoft on Tuesday announced a chatbot designed to help cybersecurity professionals understand critical issues and find ways to fix them. The Microsoft Security Copilot draws on OpenAI’s GPT-4. The chatbot can compose PowerPoint slides summarizing security incidents, describe exposure to an active vulnerability or specify the accounts involved in an exploit in response to a text prompt that a person types in. Microsoft isn’t talking about how much Security Copilot will cost when it becomes more widely available.

US officials alleged that former FTX chief Sam Bankman-Fried authorised bribes of at least US$40 million to Chinese officials. The payments came after Chinese officials in early 2021 froze some US$1 billion in cryptocurrency trading accounts controlled by FTX affiliate Alameda. The move amounts to a 13th criminal charge against the former cryptocurrency highflyer

Walgreens Boots Alliance on Tuesday said its quarterly profit declined more than 20%, driven by sharply lower Covid vaccine volumes and test sales compared to last winter, when the Covid Omicron variant surge drove strong demand. Revenue came in higher than Wall Street’s expectations (US$34.86bn vs est. US$33.53bn), rising 3.3% year over year. The company reported a net profit of $703 million compared to $883 million in the same quarter a year ago.

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

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