DAILY MORNING NOTE | 6 October 2023
Singapore shares rose on Thursday (Oct 5), reflecting US stock rallies as US Treasury yields fell. It increased 7.71 points or 0.2 per cent to 3,155.1. Across the broader market, gainers outnumbered decliners 333 to 209, as 1.1 billion securities worth S$746.3 million changed hands. Regional indices were largely up. Japan’s Nikkei 225 advanced 1.8 per cent, while the Hang Seng Index was up 0.1 per cent.
US stocks closed slightly lower on Thursday as traders braced for key employment data likely to have a bearing on the future path of interest rates. The Dow Jones Industrial Average finished the day flat at 33,119.57, reversing declines in the middle of the day. The broad-based S&P 500 closed down 0.1 per cent at 4,258.19, as did the tech-rich Nasdaq Composite Index, which fell to 13,219.83.
Singapore’s retail sales rose 4 per cent on year in August, climbing from the revised 1.3 per cent growth recorded in July, Department of Statistics (Singstat) data showed on Thursday (Oct 5). The month’s figure, which extended expansion for the seventh straight month, was higher than the median 0.9 per cent rise expected by private-sector economists polled by Bloomberg. On a month-on-month seasonally adjusted basis, retail sales rose 1.7 per cent, extending the revised 0.8 per cent expansion charted in July. August’s estimated total retail sales value was S$4 billion, with online sales accounting for 12.2 per cent. Excluding motor vehicles, retail sales still expanded by 3.7 per cent from the year-earlier period, marking the 18th consecutive month of expansion. It also gained sequentially – up 1.9 per cent on a seasonally-adjusted basis.
OKP Holdings has won a contract worth $11.7 million from PUB for drainage improvement works at several locations islandwide. Works related to the contract will be done by Sept 2026. “We are encouraged by the trust and confidence shown in our drainage/sewage specialisation and expertise and will focus on the smooth delivery,” says Or Toh Wat, the company’s group managing director. With this contract win, OKP now has a total orderbook of $583.7 million. OKP shares last changed hands at 21 cents, up 31.25% year to date.
ESR-Logos Real Estate Investment Trust’s (Reit) high-specifications industrial building at 7002 Ang Mo Kio Avenue 5 has secured an occupancy of about 50 per cent, upon achieving its temporary occupation permit. This follows the completion of the property’s asset-enhancement initiative, which involved its development into a multi-tenanted high-specifications building with a gross floor area of 25,000 square metres. The space is suitable for advanced manufacturing, info communications and data centre tenants, said the Reit manager on Thursday (Oct 5). Units of ESR-Logos Reit ended Thursday 3.8 per cent or S$0.01 higher, at S$0.275.
Oil prices fell about 2 per cent on Thursday, extending the previous session’s losses of nearly 6 per cent, as worries about fuel demand outweighed an Opec+ decision to maintain oil output cuts, keeping supply tight. Global benchmark Brent crude futures and US West Texas Intermediate ( WTI) crude futures have declined about US$10 a barrel in less than 10 days after edging close to US$100 in late September. The combined percentage drop over the last two days was the steepest since May for both crude benchmarks. Brent futures settled US$1.74, or 2.03 per cent, lower at US$84.07, while US West Texas Intermediate crude futures were US$1.91, or 2.3 per cent, lower at US$82.31.
Shares of Rivian Automotive fell sharply on Thursday, after the company surprised investors with a plan to offer $1.5 billion in convertible notes. It also provided a preliminary estimate of its third-quarter revenue that was in line with Wall Street estimates. Rivian said it expects its third-quarter revenue to come in between $1.29 billion and $1.33 billion, roughly in line with Wall Street estimates of $1.3 billion. Rivian also estimated that it had cash and equivalents of $9.1 billion as of Sep. 30, down from $10.2 billion at the end of the second quarter. Rivian plans to offer $1.5 billion worth of senior, unsecured “green” convertible notes due in 2030. Buyers will have the option to purchase up to an additional $225 million worth of notes, the company said. Shares closed down over 22% on Thursday.
The U.S. labor market held strong as September came to a close, with weekly jobless claims holding around recent lows, the Labor Department reported Thursday. Initial filings for unemployment benefits totaled a seasonally adjusted 207,000 for the week ended Sept. 30, up just 2,000 from the previous period and below the Dow Jones consensus estimate for 210,000. Continuing claims, which run a week behind, were little changed at 1.664 million, below the 1.68 million estimate from FactSet. The four-week moving average of claims, which irons out volatility, fell to 208,750, a decline of 2,500.
Dell Technologies on Thursday (Oct 5) reiterated that it expects revenue to grow at a compounded annual rate of 3 per cent to 4 per cent over the long term, disappointing some investors who expected AI to drive a bigger sales jump and sending its shares down 4 per cent. The company, which makes PCs and servers that are used to support technology like ChatGPT, also forecast long-term adjusted earnings per share growth of 8 per cent or more and said it would buy back another US$5 billion in stock on top of a similarly sized repurchase plan launched in 2021. The revenue outlook suggests that the boost from generative AI could take longer to materialise for the company whose shares have rallied nearly 20 per cent since a strong earnings report in August on optimism about its role in enabling the new technology.
Levi Strauss on Thursday cut its full-year sales forecast, as it missed Wall Street’s quarterly revenue expectations and was dragged down by weaker shopping trends at department stores and big-box retailers across the U.S. The company’s more cautious outlook comes just three months after it already slashed its full-year profit outlook. It said it now expects net revenues to be flat to up 1% year-over-year compared with a prior range of between 1.5% to 2.5% growth. It said it anticipates adjusted earnings per share to be on the low-end of the previously shared range of $1.10 to $1.20. Net income for the three-month period that ended Aug. 27 was $10 million, or 2 cents per share, compared with $173 million, or 43 cents per share a year earlier. On an adjusted basis, earnings per share were 28 cents. Sales were roughly in line from the $1.52 billion in revenue that the company reported in the year-ago period.
Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, CNBC, WSJ, The Business Times, PSR
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