Daily Morning Note – 5 May 2021
U.S. equity futures wavered and Asian stocks were set for a volatile open Wednesday after a selloff in technology shares, amid comments from Treasury Secretary Janet Yellen on interest rates that rattled markets. The dollar rose. Nasdaq 100 contracts retreated after weakness in megacaps such as Apple Inc., Tesla Inc. and Amazon.com Inc. dragged the index lower. The S&P 500 pared losses with gains in the commodity, financial and industrial sectors. Australian and Hong Kong futures declined. Holidays in major markets including Japan, China and South Korea will limit trade in Asian hours.
Mainboard-listed telco StarHub saw its first-quarter earnings continue to slide on the back of lower service Ebitda, and losses in fledgling enterprise units, according to a business update on Tuesday. Net profit fell by 24 per cent year on year to S$30.5 million for the three months to March 31, while revenue was down by 3.8 per cent to S$487.1 million, stymied by the consumer mobile business and fewer security projects.
SIA Engineering Company (SIAEC) managed to stay in the black in the second half of its financial year, with generous help from government wage subsidies even as the company pared staff, sub-contract and material costs. Still, it could not stave off a full-year loss, said the maintenance, repair and operations (MRO) service provider in a bourse filing on Tuesday.
AEM Holdings is the latest technology-related stock to disappoint analysts this earnings season, as the sector deals with a global chip shortage. AEM said its net profit fell by 63.1 per cent to S$13.3 million for the three months to March 31. Revenue was down 45.4 per cent to S$80.2 million. AEM did note that its latest results followed a “record-breaking Q1 2020”.
OUE Commercial Reit (OUE C-Reit) on Tuesday posted a 1.6 per cent drop in its first-quarter net property income to S$61.1 million, due to provision for rental rebates to some retail tenants, partially offset by lower property operating expenses.
First Real Estate Investment Trust (First Reit) saw first-quarter distribution per unit (DPU) fall to 0.65 Singapore cent, after issuing more than 791 million new rights units. The DPU was 65.1 per cent lower than the year-ago payout of 1.86 cents. If not for the issuance of the new units in February, DPU would have slid 31.7 per cent to 1.27 cents.
Ascendas Reit is buying the remaining 75 per cent equity stake in Galaxis, a business park at one-north for about S$534.4 million. Including the acquisition fee of about S$5.4 million, stamp duty, professional and other fees and expenses of S$4 million, the total purchase cost is about S$543.8 million.
Crisis-hit Singaporean water-treatment company Hyflux has six final offers including one to restructure the entire firm, after an April 30 target for finalising binding term sheets, a person familiar with the matter said. The restructuring bid is the only offer that takes into account retail investors in Hyflux’s perpetual securities and preference shares, according to the person, who asked not to be identified because the matter is private.
Ride-hailing company Lyft showed continued signs of pandemic recovery in its first-quarter earnings report Tuesday. The company beat on the top and bottom lines and exceeded Wall Street’s rider expectations for the quarter. Shares of Lyft were up 7% in after-hours trading following the report.
CVS Health on Tuesday reported a strong first quarter and raised its full-year forecast, as customers came to its stores for Covid-19 vaccinations, tests and prescriptions. The company has been a major provider of Covid-19 vaccines and recently began offering same-day appointments for the shots. Shares of the company were up more than 4% Tuesday afternoon and touched a 52-week high of $80.94.
Pfizer said Tuesday it plans to file for full U.S. approval of its Covid-19 vaccine with German drugmaker BioNTech at the end of this month. If the FDA signs off, the company will be able to market the shot directly to consumers. In its earnings report, Pfizer said first-quarter sales of its Covid-19 vaccine was $3.5 billion, roughly 24% of its revenue for the quarter. Its profit and revenue beat Wall Street’s expectations.
Under Armour on Tuesday raised its sales and profit outlook for the full year, as the sports apparel maker sees demand for its brand roaring back with shoppers returning to its stores. It reported first-quarter sales growth of 35%, topping analyst expectations. The company is lapping a period a year earlier, when its stores were temporarily shut and Under Armour had to turn to layoffs and other cost-cutting measures to fight through the health crisis.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
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