DAILY MORNING NOTE | 30 August 2023

Singapore shares rose for the sixth straight session on Tuesday (Aug 29) ahead of a slew of key economic indicators from major economies, chiefly the US, and some optimism from China’s latest support measures. On the home front, some 1.3 billion securities worth S$835.6 million changed hands on Tuesday. Gainers trounced losers, with 275 counters up and 242 down. Thomson Medical Group was the day’s third-most active with 49.3 million shares changing hands. The stock finished at S$0.06, up S$0.002 or 3.5 per cent.

US STOCKS notched solid gains on Tuesday as traders digested a surprise decline in the number of job openings, raising the chances of softer Federal Reserve interest rate policy going forward. The Dow Jones Industrial Average finished 0.9 per cent higher at 34,852.67. The broad-based S&P 500 climbed 1.5 per cent to 4,497.63, while the tech-heavy Nasdaq Composite Index surged 1.7 per cent to end the day at 13,943.76. The Labor Department announced Tuesday that the number of job openings edged down to 8.8 million on the last business day of July.

Top gainers & losers

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EVENTS OF THE WEEK

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SG

Construction group Tiong Seng Holdings has lodged a police report against the former managing director of its subsidiary, Robin Village Development (RVD), Michael Seah and his wife, Neo Kim Neo. In a bourse filing on Tuesday (Aug 29), the company said that it conducted an internal investigation into the couple after it received a whistleblower report about Seah’s conduct. It found that Seah and Neo, who served as RVD’s head of human resources and administration, had allegedly diverted business and profits to SW Metal & Construction, a company owned and controlled by their daughter. Tiong Seng also discovered that Seah and Neo had allegedly wrongfully utilised RVD’s resources for personal gain, and to benefit SW Metal & Construction. The company added that a preliminary estimate from the internal investigation puts the potential loss to RVD at approximately S$3 million.

Real estate group GuocoLand posted a 54.5 per cent decline in net profit to S$148 million for the half-year ended Jun 30, down from S$325.2 million in the corresponding year-ago period. This comes despite the group posting a 72.2 per cent increase in revenue to S$882.9 million for the half-year, from S$512.8 million a year ago. In its earnings release, the group said on Tuesday (Aug 29) that the absence of fair-value gains on interest rate hedges in FY2023 resulted in other income falling by 50.9 per cent to S$161 million in the same period year on year (yoy). In addition, finance costs rose 64.7 per cent yoy to S$89 million, putting further pressure on the group’s net profit margin. Earnings per share for the half-year stood at S$0.1251, from S$0.2845 in the year before. The group’s board declared a final dividend of S$0.06 per share for FY2023, equal to what was paid out last year.

Transport operator ComfortDelGro has promoted the chief operating officer of its Singapore taxi business, Tommy Tan, to chief executive officer of the business with effect from Sep 1. In a press statement on Tuesday (Aug 29), the company said Tan will take over from Jackson Chia, who will remain chief executive of ComfortDelGro’s Private Mobility Group. The group oversees the company’s local taxi, private bus and car leasing businesses. Tan has been with ComfortDelGro since September 2019, and did a six-month stint at Swan Taxi, the group’s taxi business in Perth, Western Australia. He has also served as a member of the Tripartite Work Group on Representation for Platform Workers, which was formed in August last year. The government accepted all eight of the work group’s recommendations in July this year.

Frasers Property has appointed Thapana Sirivadhanabhakdi to be chairman of its board executive committee (Exco) from Wednesday (Aug 30), following the retirement of chairman Charoen Sirivadhanabhakdi. In a bourse filing on Tuesday, the company said Charoen will also retire as a member of the Exco. Thapana Sirivadhanabhakdi is the president and chief executive of Thai Beverage, and has served as a non-executive, non-independent director since Jan 1, 2023. In addition, the company announced that Rodney Vaughan Fehring will be co-opted as a member of the Exco from Wednesday. Shares of Frasers Property closed flat at S$0.77 on Tuesday, before the announcement was made.

US

Vinfast Auto is unprofitable, thinly traded and exciting individual investors as it rises faster than any other large-cap stock worldwide. That is a perilous combination for anyone tempted to bet on further gains in the Vietnamese electric-vehicle (EV) startup, which has soared 688 per cent since its debut in a special purpose acquisition company listing on Aug 15. VinFast’s US$190 billion market capitalisation is now bigger than half of the companies in the Dow Jones Industrial Average, including Goldman Sachs and Disney. The last time a stock with a tiny free float rose from relative obscurity to the ranks of the world’s largest companies, it did not end well for investors. AMTD Digital, another US-listed company with roots in Asia, baffled market veterans a year ago by soaring more than 32,000 per cent in the span of a few weeks. The money-losing financial services company’s paper value at one point reached over US$400 billion, exceeding that of JPMorgan Chase.

3M has agreed to pay more than US$6 billion over five years to resolve hundreds of thousands of lawsuits alleging it sold defective ear plugs to the US military that led to hearing damage for combat troops. 3M will contribute US$5 billion in cash and US$1 billion in 3M common stock through 2029 under the terms of the agreement, the company said on Tuesday (Aug 29) in a statement. 3M said it would record a third-quarter pre-tax charge of about US$4.2 billion, on top of the US$1.1 billion it has already allocated for the claims. The deal resolves a major source of uncertainty for 3M investors, who’ve watched the company’s market value decline by more than half since 2019 amid fears over staggering legal liabilities from the earplug claims and lawsuits over so-called forever chemicals.

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


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