DAILY MORNING NOTE | 31 May 2023

The application for the first fortnightly June tranche of MAS 6-month T-bills will be open today for investors to apply. The Auction Date, where the cut-off yield for this tranche will be announced is on 8th June 2023.

Latest Singapore 6 Month Treasury Bill result
Cut-Off Yield: 3.85%
% of Non-Competitive Application Allotted: 100%

Local shares finished the trading day largely unchanged as investors cautiously sought out opportunities in the market, with a close watch on developments relating to the US debt ceiling matter, as well as the likely effects of the impending deal. Singapore stocks fell 0.2 per cent or 7.66 points to close on Tuesday (May 30) at 3,187.56. Decliners narrowly outpaced advancers 266 to 256, after 1.2 billion securities worth about S$812 million changed hands.

The Dow Jones Industrial Average fell on Tuesday as Wall Street considered the likelihood of Congress passing a tentative deal on raising the U.S. debt ceiling. The 30-stock index lost 50.56 points, or 0.15%, to end at 33,042.78. The S&P 500 eked out a 0.002% gain to close at 4,205.52, after trading both above and below the flatline during the session. The Nasdaq Composite added 0.32% to finish at 13,017.43, paring gains after trading up as much as 1.4% earlier in the day.

SG

Majority shareholders of consumer electronics retailer Challenger Technologies have made a voluntary unconditional cash offer of S$0.56 per share to take the company private. The offer is being made with a view to delist the company from the Singapore Exchange (SGX), as indicated by a bourse filing on Tuesday (May 30) afternoon. The offeror, DigiTech Holding, is the bid vehicle of a consortium formed by Challenger’s majority shareholders that collectively hold around 54.4 per cent of the company’s shares. The consortium comprises Asia Consumer Electronics, a special purpose vehicle (SPV) linked to Dymon Asia Private Equity, and Fortuna Capital, an SPV wholly owned by Challenger chief executive Loo Leong Thye.

The Securities Investors Association (Singapore) or Sias, is recommending that Golden Energy and Resources (Gear) minority shareholders reject the exit offer by the controlling shareholders. Minority shareholders have been asked to accept the distribution in-specie of Gear’s Gem stake and the cash alternative at S$0.792 per Gear share. In an e-mail to Gear’s board of directors, David Gerald, president of Sias, said that the independent financial adviser (IFA) had conflated the two corporate actions of the exit offer and the distribution of Golden Energy Mines (Gem) shares. This was despite the issue being highlighted as a concern in a press statement by Sias after meeting Gear representatives.

Olam Group’s proposed initial public offering (IPO) of its agribusiness unit is no longer expected to be completed by H1 of 2023 or ahead of the summer holiday period, as originally planned. On Tuesday (May 30), the agri-food giant said all necessary regulatory approvals required to launch Olam Agri’s IPO have yet to be obtained to date, given the “distinct nature” of the transaction. Assuming the listing goes through, the group noted that Olam Agri would be the first foreign company not incorporated in a Gulf Cooperation Council country to be listed in Saudi Arabia. It would also represent the first dual listing on both the Singapore Exchange and the Saudi Exchange, as well as the first potential offering of Saudi Depositary Receipts.

US

HP reported sales that fell further than analysts’ estimated, a sign the company continues to be hamstrung by the ongoing slump in demand for personal computers. Revenue declined 22 per cent to US$12.9 billion on a worse-than-expected drop in consumer PC sales, the company said on Tuesday (May 30) in a statement. HP’s Personal Systems segment fell 29 per cent to US$8.2 billion, compared with analysts’ average estimate of US$8.4 billion.

Oil prices fell more than 4 per cent on Tuesday on concerns about whether the US Congress will pass the US debt ceiling pact and as mixed messages from major producers clouded the supply outlook ahead of the Opec+ meeting this weekend. Brent crude futures settled down US$3.53, or 4.6 per cent, at US$73.54 a barrel. US West Texas Intermediate crude (WTI) was down US$3.21, or 4.4 per cent, from Friday’s close, to US$69.46 a barrel. There was no settlement on Monday because of a US public holiday.

Shares of Tesla rose 5 per cent on Tuesday after the electric carmaker’s CEO Elon Musk met with China’s Foreign Minister Qin Gang. It comes as Beijing is pushing to show it is open to foreign business, and as Musk reportedly signaled further expansion of his car company’s business in China. Qin, who was until recently China’s ambassador to the U.S., said “Chinese-style modernization,” characterized by a huge population and “common prosperity” will create “unprecedented growth potential and market demand,” according to a statement from the Chinese foreign ministry.

Gold bounced back from early losses on Tuesday, as the dollar pulled back and Treasury yields slid on wider market optimism about the U.S. debt ceiling deal. Spot gold rose 0.8% to $1,958.59, after hitting its lowest since March 17 earlier. U.S. gold futures added 0.7% at $1,958. The dollar eased from 10-week highs, making bullion cheaper for holders of other currencies, while benchmark 10-year Treasury yields hit a one-week low.

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

RESEARCH REPORTS

PSR Stocks Coverage

For more information, please visit:

https://www.stocksbnb.com/singapore-stocks-coverage/