DAILY MORNING NOTE | 30 June 2023
The application for the first fortnightly July tranche of MAS 6-month T-bills is open on Wednesday for investors to apply. The Auction Date, where the cut-off yield for this tranche will be announced on 6th July 2023.
Latest Singapore 6-Month Treasury Bill result
Cut-Off Yield: 3.89%
% of Non-Competitive Application Allotted: 100%
Singapore shares ended the Wednesday (Jun 28) with a marginal gain of 0.1 per cent or 1.93 points at 3,207.28. Nio was the top gainer, rising 7.4 per cent or US$0.64 to close at US$9.25. Don Agro was another top gainer, adding 73.7 per cent or S$0.14 to S$0.33 after announcing the proposed sale of its crop and milk production businesses. Jardine Matheson Holdings was the biggest loser for the day, shedding 1.2 per cent or US$0.63 to US$51.72. The market was closed on Thursday (Jun 29) to observe Eid al-Adha.
The Dow Jones Industrial Average rose on Thursday as big bank names gained after passing the Federal Reserve’s annual stress test, and a revised upward GDP print alleviated some recession fears on Wall Street. The 30-stock index jumped 269.76 points, or 0.8 per cent, to finish at 34,122.42, lifted by major bank names. The S&P 500 added 0.45 per cent to end at 4,396.44, while the tech-heavy Nasdaq Composite closed flat at 13,591.33. JPMorgan Chase and Goldman Sachs each rose more than 3 per cent, while Wells Fargo advanced 4.5 per cent. The action came a day after the central bank said all 23 institutions included in its annual stress test are well capitalized to weather a severe recession scenario.
Temasek is selling around S$400 million (US$295.92 million) worth of shares, or a 1.85 per cent stake, in Singapore Airlines (SIA), according to a term sheet seen by Reuters on Wednesday (Jun 28). The shares are priced between S$7.202 and S$7.283 per share, the sheet shows, representing a 2.89 per cent and 3.97 per cent discount to the last close of S$7.50 on Wednesday. Temasek will continue to be a major shareholder in SIA with a 53.5 per cent stake, according to Reuters’ calculations.
Guocoland on Wednesday (Jun 28) said it obtained a S$974 million green club facility, raised under its newly-established green finance framework. The club facility, which comes from DBS, UOB, OCBC and Sumitomo Mitsui Banking, is the property developer’s largest to date, it said. It will be used to refinance its flagship asset Guoco Tower, particularly the building’s commercial components.
The extraordinary general meeting (EGM) to vote on the removal of the manager of Sabana Industrial Real Estate Investment Trust (Sabana Reit) will take place on Aug 4. Activist investor Quarz Capital requisitioned the EGM to pass a first resolution to remove Sabana Reit’s current manager as soon as practicable. Another resolution will effect the internalisation of the Reit management function by incorporating a subsidiary wholly owned by the trustee, and appointing this subsidiary to act as the manager of Sabana Reit. Quarz Capital reiterated that the two EGM resolutions are independent and standalone resolutions.
US Federal Reserve Chair Jerome Powell said on Wednesday (Jun 28) that the central bank is leaving open the possibility of consecutive interest rate hikes in the months ahead, to cool the economy further. “We believe there’s more restriction coming,” Powell told a central banking conference in Portugal on Wednesday. The comments reiterate a position taken by Powell’s fellow policymakers at their June meeting, during which they indicated the likelihood of another half percentage point of increases through the end of 2023. But he added that the Fed has not decided whether it will raise rates every other meeting, as some analysts have suggested. “I wouldn’t take, you know, moving to consecutive meetings off the table at all,” he said.
The U.S. economy showed much stronger-than-expected growth in the first quarter than previously thought, according to a big upward revision Thursday from the Commerce Department. Gross domestic product increased at a 2% annualized pace for the January-through-March period, up from the previous estimate of 1.3% and ahead of the 1.4% Dow Jones consensus forecast. This was the third and final estimate for Q1 GDP. The growth rate was 2.6% in the fourth quarter. The upward revision helps undercut widespread expectations that the U.S. is heading toward a recession. A separate economic report released Thursday showed layoffs running well below expectations, indicating that labor market strength has held up even in the face of the Federal Reserve’s 10 interest rate hikes totaling 5 percentage points.
Nvidia’s financial chief said restrictions on exports of artificial intelligence (AI) chips to China “would result in a permanent loss of opportunities for the US industry” though the company expected no immediate material impact. US officials are considering tightening an export control rule designed to slow the flow of AI chips to China by clamping down on the amount of computing power the chips can have, according to two people familiar with the matter. The new curbs being mulled by the US would ban the sale of even the company’s A800 chips, which were designed specifically for Chinese customers to meet the export rules set in October last year, without a special US export license.
Oracle is spending “billions” of dollars on chips from Nvidia as it expands a cloud computing service targeting a new wave of artificial intelligence (AI) companies, Oracle founder and chairman Larry Ellison said on Wednesday (Jun 28). The company will also spend even more on central processor units (CPUs) from Ampere Computing and Advanced Micro Device (AMD), Ellison said at an Ampere event.
Oracle on Wednesday (Jun 28) said it is adding generative artificial intelligence (AI) features to its human resources software for businesses, aiming to help draft job descriptions and employee performance goals, among other tasks. Rich Buchheim, vice-president of product management for Oracle Adaptive Intelligence Applications, said the resulting text will still need to be approved by a human. The features are expected to roll out by the end of this year.
Micron Technology beat estimates for third-quarter results on Wednesday (Jun 28), powered by demand for its memory chips from the rapidly-growing artificial intelligence (AI) sector and an easing supply glut in its traditional PC and smartphone markets. Micron’s third-quarter revenue of US$3.75 billion beat estimates of US$3.65 billion, while fourth-quarter revenue forecast of about US$3.9 billion plus or minus US$200 million, was largely in line with expectations. The company’s adjusted net loss of US$1.43 per share was narrower than estimates for a US$1.58 per share loss. “The recent acceleration in the adoption of generative AI is driving higher-than-expected industry demand for memory and storage for AI servers, while traditional server demand for mainstream data centre applications continues to be lacklustre,” CEO Sanjay Mehrotra said.
Blackberry posted a surprise profit for the first quarter on Wednesday (Jun 28) as its cybersecurity business benefited from higher client spending, while its enterprise software continued to gain traction in automotive sector. BlackBerry reported a surprise profit of 6 cents per share for the quarter ended May 31, while analysts were expecting a loss of 5 US cents per share. Its total revenue of US$373 million topped analysts’ average estimate of US$160.4 million.
Volkswagen is in talks with Tesla to adopt its North American Charging Standard (Nacs) technology, while the German automaker’s charging network unit Electrify America has already agreed to use the system. The announcement comes as a slew of automakers and charging equipment makers choose Tesla’s charging design on concerns of losing out on customers if they offer only the Combined Charging System (CCS) design, which is backed by automakers like Volkswagen and Hyundai Motor. Ford, General Motors and ChargePoint are among the companies that have signed up for Tesla’s charging design in the past few weeks.
The Federal Trade Commission (FTC) plans to file a far-reaching antitrust suit focused on Amazon’s core online marketplace, according to documents reviewed by Bloomberg and three people familiar with the case. The main allegation is expected to be that Amazon leverages its power to reward online merchants that use its logistics services and punish those who do not. Based on her public comments, FTC commissioner Lina Khan is said unlikely to accept compromises from Amazon and could seek to restructure the company – a dramatic outcome that Amazon would surely appeal.
Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR
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