Daily Morning Note – 5 October 2021
Asian stocks look set to fall Tuesday after technology shares led a U.S. slide amid concern that surging raw-material prices will stoke inflation and sap economic momentum. A commodity index hit a record high.
Stocks slipped in Australia, as did equity futures for Japan and Hong Kong. U.S. contracts stabilized after the S&P 500 declined to the lowest since July and the Nasdaq 100 shed over 2%, dragged down by megacap tech firms like Amazon.com Inc. and Facebook Inc. The energy sector was among the few to rise in the U.S. session.
Ten-year U.S. Treasury yields climbed back toward 1.5% and the dollar held a drop. Oil in New York reached the highest since 2014 following OPEC+’s decision to maintain a gradual supply hike even as a natural-gas crisis boosts crude demand. The Bloomberg Commodity Spot Index soared to an all-time peak.
A subsidiary of Sembcorp Industries (SCI), Sembcorp Utilities, has signed a memorandum of understanding (MOU) with Chiyoda Corporation and Mitsubishi Corporation to explore the feasibility and implementation of a commercial-scale supply chain to deliver decarbonised hydrogen into Singapore. In a joint statement on Monday, the companies said that the MOU represents a “strategically important step in the potential creation of a commercial-scale global supply chain for decarbonised hydrogen into Singapore.” The supply chain would utilise Chiyoda’s “proven hydrogen storage and transportation technology”, SPERA Hydrogen. The technology allows for hydrogen to be safely stored “under ambient temperature and pressure in large quantities for long periods of time and to transport hydrogen over long distances in the form of methylcyclohexane (MCH)”.
Catalist-listed Aoxin Q&M Dental Group announced it has entered into a conditional sale and purchase agreement to acquire 49 per cent of Acumen Diagnostics for S$29.4 million. To fund the acquisition, Aoxin Q&M – an associated company of Q&M Dental Group – will issue 127.3 million new ordinary shares at 23.1 Singapore cents per share, it said in a bourse filing on Monday. Aoxin expects the acquisition will allow it to enter the medical diagnostics business in Singapore and capture a significant portion of the testing capacity market, as well as improve its profitability.
The manager of SPH Reit on Monday announced distribution per unit (DPU) of 1.58 Singapore cents for the fourth quarter ended August. This brings DPU for the second half of FY2021 to 2.94 cents, up 184.6 per cent from DPU of 1.04 cents in H2 last year. Gross revenue climbed 27 per cent year-on-year during the six-month period to S$137.2 million, while net property income was up 24.6 per cent to S$97.8 million. For the full year, the group also saw gross revenue climb 14.8 per cent to S$277.2 million, while net property income increased 11.4 per cent to S$202.6 million.
Facebook, Instagram and WhatsApp are once again accessible, more than six hours after users first reported a major outage that took the services offline on Monday. Some of the services are not yet fully functioning — for example, some users are still reporting problems posting new content to Instagram. “To the huge community of people and businesses around the world who depend on us: we’re sorry,” Facebook said in a statement. “We’ve been working hard to restore access to our apps and services and are happy to report they are coming back online now. Thank you for bearing with us. Facebook did not disclose what went wrong. All three platforms stopped working shortly before noon ET, when the websites and apps for Facebook’s services were responding with server errors. Reports on DownDetector.com showed the outages appeared to be widespread, but it was unclear how many users were unable to access the apps.
Delta Air Lines said on Sunday that its ticket sales had stabilized and started to improve, putting it on course to deliver third-quarter revenue within its original forecast for a 30%-35% drop versus corresponding 2019 levels. This is an improvement from its projection last month when it adjusted the forecast to the lower end of that range after a resurgence in Covid-19 cases. The airline is due to report results for the quarter through September on Oct. 13. “For Delta, they bottomed out in the later part of August and the first part of September,” Chief Executive ED Bastian told reporters on the sidelines of a meeting of airlines group IATA. “Business traffic is growing back in the U.S.”
Airbus SE is confident its global supplier base can overcome pandemic-induced pressures and boost output for the company’s workhorse A320 aircraft family, despite the “unprecedented” labour and materials strains currently complicating that effort, its chief executive officer Guillaume Faury has said. In an interview on Sunday, he reaffirmed the company’s plan to boost A320 output from 40 per month today to 64 a month in 2023, and said Airbus remains interested in potentially reaching 75 per month around mid-decade. It is essential that the plane-maker’s vast supply chain have those ambitious, longer-term targets in mind as they manage through the current turmoil, he said. “That anticipation is required for the supply chain to do the right things because we’re in an unprecedented situation in terms of tension in the supply chain. And we need to start the ramp-up,” said Mr Faury, who is in Boston for a global aviation summit hosted by the International Air Transport Association (Iata).
McDonald’s Corp on Monday set a new target to cut global greenhouse gas emissions to net zero by 2050, with changes in policy affecting the beef in its burgers to the light bulbs in its restaurants. The burger chain also said it was working with the non-profit Science Based Targets initiative (SBTi) to revamp its existing climate-change targets. It aims to lower absolute emissions by about a third for both its suppliers and its nearly 40,000 company-run and franchised restaurants around the world by 2030. “We’re trying to send a signal to our partners, to our investors, to our suppliers, to other brands in the global community, to policy-makers, that we share that vision for 2050,” McDonald’s chief sustainability officer Jenny McColloch told Reuters in an interview.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
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