DAILY MORNING NOTE | 7 July 2023

Singapore shares fell 1.1 per cent or 34.95 points to 3,150.43 on Thursday (Jul 6) as investor sentiment weakened amid geopolitical concerns and interest rate expectations. Across the broader market, losers beat gainers 338 to 196, after 1.2 billion securities worth S$1.1 billion were traded. Major Asian bourses were also in the red. Japan’s Nikkei 225 fell 1.7 per cent, Hong Kong’s Hang Seng Index tumbled 3 per cent, while South Korea’s Kospi lost 0.9 per cent.

WALL Street stocks dropped on Thursday (Jul 6) following strong US economic data that boosts the chances for more Federal Reserve interest rate hikes.Thursday’s reports included releases from payroll firm ADP estimating the US economy added 497,000 jobs last month, more than double the expected amount. Also, a survey by the Institute for Supply Management pointed to solid growth in the services sector in June, again suggestive of a growing economy. The Dow Jones Industrial Average finished at 33,922.26, down 1.1 per cent. The broad-based S&P 500 dropped 0.8 per cent to 4,411.59, while the tech-rich Nasdaq Composite Index also declined 0.8 per cent to 13,679.04.

SG

SINGAPORE’S latest six-month Treasury bills, also known as T-bills, offered a cut-off yield of 3.99 per cent – up from last month’s 3.89 per cent. The Monetary Authority of Singapore’s (MAS) data, published on Thursday (Jul 6), showed that a total of S$5.4 billion was allotted out of the S$10.3 billion received in applications. The bid-to-cover ratio was 1.91.

SINGLE family offices (SFOs) that have applied for and have been awarded tax incentives in Singapore employ about 1,400 Singaporeans and permanent residents (PRs), about two-thirds of whom are paid more than S$5,000 per month, Senior Minister Tharman Shanmugaratnam said on Thursday (Jul 6). In a written parliamentary reply, he said the Monetary Authority of Singapore (MAS) does not have data on all SFOs in Singapore, since they do not need to be licensed by the authority. This is because they do not manage third-party assets.

The sponsor of Sabana Industrial Real Estate Investment Trust (Sabana Reit) on Thursday (Jul 6) shot back at an open letter from activist investor Quarz Capital, which had sought support from the authorities to ensure fair conduct of an upcoming extraordinary general meeting (EGM).In response, ESR Group said Quarz’s push for a vote on internalisation without first securing the in-principle consent of lenders to continue with current financing arrangements, or ensuring that standby facilities are in place, is “irresponsible and reckless”.

US

The US services sector grew faster than expected in June as new orders picked up, but a measure of prices paid by businesses for inputs fell to more than a three-year low, suggesting that the closely watched services inflation would continue to cool. The Institute for Supply Management (ISM) said on Thursday that its non-manufacturing PMI increased to 53.9 last month from 50.3 in May. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy. Economists polled by Reuters had forecast the non-manufacturing PMI rising to 51.0.

The US dollar turned lower on Thursday (Jul 6) as investors looked ahead to pivotal US labour market data following minutes from the Federal Reserve’s June meeting, while a broad risk-off mood lent support to the Japanese yen.

FORD Motor on Thursday (Jul 6) followed rivals in reporting a rise in second-quarter US auto sales, driven by easing supply chain snags and pent-up demand for personal transportation.The US automaker’s quarterly sales rose about 10 per cent to 531,662 vehicles, the company said.

ULTRA low-cost e-commerce platform Temu, owned by PDD Holdings, has started selling to Japan, marking its first foray into the Asian market.The marketplace, the sister site of Chinese discount e-commerce platform Pinduoduo, ships everything from clothing to electronics and home goods, mainly from Chinese merchants to customers overseas at rock bottom prices.A drop-down menu on Temu’s website confirms Japan is one of the countries it now ships to.

US auto safety regulators said on Thursday (Jul 6) they are seeking updated responses and current data for an ongoing probe into 830,000 Tesla vehicles and the automaker’s advanced driver assistance system Autopilot. The National Highway Traffic Safety Administration (NHTSA) sent Tesla a letter on Jul 3 seeking updates to questions it had asked in August 2022 and is now demanding answers by Jul 19, according to a copy of the letter made public by the agency. Tesla did not respond to a request for comment.

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

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