DAILY MORNING NOTE | 5 March 2024

Trade of the Day

Olam Group Ltd (SGX: VC2)

Analyst: Zane Aw

(Current Price: S$1.02) – TECHNICAL BUY
Buy price: S$1.02 Stop loss: S$0.975 (-4.41%) Take profit 1: S$1.08 (+5.88%) Take profit 2: S$1.13 (+10.78%)

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Trades Initiated in the past week

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Singapore shares ended lower on Monday (Mar 4), bucking gains in the region. Singapore stocks fell 0.4 per cent or 13.55 points to 3,122.21. Across the broader market, losers outnumbered gainers 342 to 232, after 1.6 billion securities worth S$967.8 million changed hands. The Nikkei 225 rose 0.5 per cent, the Kospi Composite Index gained 1.2 per cent, the Hang Seng Index inched up 0.04 per cent, while the FTSE Bursa Malaysia KLCI was up 0.1 per cent.

Wall Street stocks retreated on Monday, pulling back from records, as markets awaited key economic data and central bank actions later in the week. Besides key readings on the US jobs market and the state of the services industry, this week’s calendar includes congressional testimony from Federal Reserve Chair Jerome Powell, President Joe Biden’s State of the Union address and a European Central Bank decision. The Dow Jones Industrial Average finished down 0.3 per cent at 38,989.83. The broad-based S&P 500 declined 0.1 per cent to 5,130.95, while the tech-rich Nasdaq Composite Index fell 0.4 per cent to 16,207.51.

Top gainers & losers

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Events Of The Week

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SG

CapitaLand Development (CLD), the development arm of Singapore’s CapitaLand Group, intends to grow its residential portfolio in Vietnam to 27,000 units by 2028. This new five-year target is about 70 per cent higher than the current portfolio of about 16,000 units across 17 projects and includes 7,500 units in its two latest residential projects in Vietnam – Sycamore, in the southern province of Binh Duong, and Lumi Hanoi in the capital Hanoi, said CLD in a news release on Monday (Mar 4). The two projects – the largest projects by CLD in Vietnam to date – had their groundbreaking ceremonies last week, and the plan is for both to be launched in the second quarter of this year.

City Developments Ltd (CDL) is close to sealing a deal to buy the Hilton Paris Opera hotel from asset management giant Blackstone for 244 million euros (S$356 million). The group is “currently engaged in discussions on the potential acquisition” of the 268-key hotel, CDL said in response to queries from The Business Times. If the deal is completed, this will be the third hotel CDL has acquired in Paris. It also owns the 163-room M Social Hotel Paris Opera and the 239-room Millennium Hotel Paris Charles de Gaulle, under its subsidiary, Millennium & Copthorne Hotels. The Hilton hotel would also be CDL’s third major acquisition of a European property from Blackstone in recent years.

Freehold condominium Island View in Pasir Panjang will be relaunched for sale by tender on Tuesday (Mar 5) – but this time, plans are underway to lower the reserve price by 7.5 per cent to S$532 million as market sentiment softens, sole marketing agent PropNex said on Monday. This follows the owners’ previous attempt last year, which closed with no bids in October. The owners are now collecting signatures to get an 80 per cent mandate to cut the reserve price to S$532 million, from S$575 million previously. Currently, more than 60 per cent of them are in favour of the change.

Hwa Hong Corporation has sold OneTen Paya Lebar, an eight-storey high-tech industrial building that houses a data centre, for S$140 million. The new owner is understood to be an entity linked to Big Data Exchange (BDx), which operates the data centre facility in the freehold building. BDx, which was already the sole tenant in the building prior to the deal, also operates a chain of data centres in China, Hong Kong and Indonesia, according to information on its website. The company is a portfolio asset of I Squared Capital, a private equity group headquartered in Miami.


US

Oil prices settled slightly lower on Monday, as demand headwinds counterbalanced a widely expected extension of voluntary output cuts through the middle of the year by the Opec+ producer group. Brent futures settled down 75 cents to US$82.80 a barrel, while US West Texas Intermediate (WTI) settled down US$1.24, or 1.5 per cent, to US$78.74 a barrel. The Organization of the Petroleum Exporting Countries and its allies (Opec+) are extending their voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter to support prices amid global growth concerns and rising output outside the group.

Sea announced its first-ever profitable year with earnings of US$162.7 million for 2023, reversing from a loss of US$1.7 billion in 2022. But this missed analysts’ estimates of US$301.7 million. Revenue for the period rose 4.9 per cent to US$13.1 billion from US$12.4 billion a year prior, exceeding analysts’ forecasts of US$12.9 billion. Earnings were bolstered by e-commerce arm Shopee booking profits for the first two quarters of 2023. E-commerce revenue for 2023 rose 23.5 per cent to US$9 billion from US$7.3 billion in 2022. The business unit booked a loss of US$550.5 million for the year. Sea’s digital entertainment unit, Garena, continued its slide in revenue, falling 44 per cent to US$2.2 billion in 2023 from US$3.8 billion in 2022. It booked a profit of US$1.2 billion for 2023.

Apple on Monday announced new versions of its 13-inch and 15-inch MacBook Air laptops with its latest M3 chip. Apple launched the M3 chip in October with versions for its iMac desktop computer and more powerful versions for its MacBook Pro laptops. Apple reported $7.78 billion in Mac revenue during its fiscal first-quarter earnings report, which showed less than 1% growth. The latest computers may help boost the company’s sales. Apple said its new MacBook Air laptops offer sharper 1080p webcams, support for faster Wi-Fi networks and up to 18 hours of battery life. The design remains the same as earlier models. The new M3 chip allows users to add up to two external displays, an improvement from a single screen supported by earlier chips.

American Airlines unveiled a large order on Monday of narrow-body planes from European giant Airbus, Brazil’s Embraer and Boeing, including a model from the US giant that has yet to be certified. The order comprises 260 new planes, plus options for an additional 193 aircraft, American Airlines said in a news release. “Over the past decade, we have invested heavily to modernise and simplify our fleet, which is the largest and youngest among US network carriers,” said the company’s CEO Robert Isom. The announcement includes a firm order for a further 85 Airbus A321neo jets, bringing the total number of the European manufacturer’s largest single-aisle aircraft American has ordered to 219, Airbus said. American also reached agreement to buy 90 of Embraer’s E175 planes, which can seat up to 76 passengers, plus options for as many as 43 more planes from the Brazilian company.

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


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