Date: October 21, 2024
- Third time successful for STI as it rose 1.9% to 3,640.19
- The gain was mainly thanks to the banks and Singtel
- On Wall St, tech stocks took a mid-week beating but Dow and S&P reach new all-time highs, up for sixth consecutive week
- Futures market 90% certain that next Fed rate cut will be 25 basis points
- Dyna-Mac shareholders should accept revised offer of S$0.67: Maybank
- Sabana unitholders voted for requisitionists’ directors, ignoring advice of proxy advisers
- Acrophyte Hospitality Trust saw the highest institutional inflow: SGX Research
- Sep’s NODX disappointed at 2.7% growth, dragged down by electronics
It was third time successful for the STI which finally managed to reclaim 3,600
A large push on the three banks and Singtel last week enabled the Straits Times Index to close above the 3,600 level which it had challenged twice during intraday trading in the week.
Adding to the upward impetus was a firm Wall Street, which after a mid-week wobble that saw technology stocks take a beating, eventually ended with the major indices recording their sixth consecutive week of gains.
At the end of a week which saw the STI dip below 3,600 on Tuesday and Wednesday after earlier rising above that level, the index finished at a new 17-year high of 3,640.19, a net gain of 67 points or 1.9% and exceeding the previous high of 3,638.54 achieved on 23 Sep.
Average daily volume was S$1.16b, ranging from Monday’s low of S$977m to Tuesday’s S$1.34b. Average turnover in the previous week was S$1.3b.
Within the STI, Singtel stood out with an S$0.11 or 3.5% jump to S$3.26. OCBC came next, rising S$0.43 or 2.9% to S$15.40, followed by DBS’s S$1.01 or 2.6% rise to S$39.40 and then UOB’s S$0.78 or 2.5% gain at S$32.60.
US stocks took a mid-week beating but rebounded to new highs
On Tuesday, the S&P 500 pulled back from a record after a surprise earning release from ASML Holdings slammed technology stocks. The market benchmark slid 0.8%.
The Dow, which was weighed down especially by a disappointing report from its largest stock, UnitedHealth Group, fell 325 points, or 0.8%. The Nasdaq Composite dropped 1%.
Most of the S&P 500’s worst performers on Tuesday were chip equipment manufacturing firms and other semiconductor stocks such as Nvidia and Advanced Micro Devices.
However, just two days later, sentiment in the chip space sharply reversed course after Taiwan Semiconductor Manufacturing (TSM), the world’s largest contract chipmaker, announced a blowout quarterly report and reinvigorated the artificial intelligence trade.
The Dow and S&P rebounded on Wednesday and continued rising for the rest of the week. The S&P rose to its 46th and 47th record close of the year at 5,864.67, whilst the Dow set its 40th record close of the year at 43,275.91.
Futures market pricing in 25-basis rate cut next month
According to the CME FedWatch tool, the futures market is pricing in a 90% chance of the US Federal Reserve cutting interest rates by 25 basis points at next month’s meeting, and a 10% chance that rates will be left unchanged.
Dyna-Mac shareholders should accept revised offer of S$0.67: Maybank
Maybank Securities recommended that shareholders of offshore oil-and-gas contractor Dyna-Mac accept the revised S$0.67 a share offer from South Korean company Hanwha which had earlier offered S$0.60 per share.
Hanwha said that the revised offer is final, and that it does not intend to revise the improved price but “reserves the right to do so in a competitive situation”.
Noting that the offer price exceeds Maybank Securities’ S$0.64 target price, analyst Jarick Seet said: “We think that the offer is fair, and shareholders should accept the offer even though we are currently in a floating production storage and offloading upcycle.”
The revised offer price of S$0.67 a share exceeds the counter’s previous closing prices over the past 10 years.
“Event-driven funds as well as institutional funds will likely take this chance to realise their gains and free up liquidity, as upside will be limited until Hanwha’s offer lapses,” Seet said.
Sabana unitholders voted in requisitionists’ directors, ignoring advice of proxy advisers
The six candidates proposed by a group of requisitionists were voted by unitholders to be board directors of the newly internalised manager of Sabana Industrial Real Estate Investment Trust (Sabana REIT) at an extraordinary general meeting last week.
This was counter to the advice given by proxy advisers Glass Lewis who earlier in the week recommended that unitholders should instead vote for the three directors proposed by Sabana REIT’s trustee.
The six candidates included consultant Lim Hock Chuan; corporate finance and investment professional Bhavik Umesh Doshi; and Konrad Duttwiler, who is group chief financial officer and board member of investment company Volare Group.
The other three were activist investor Quarz Capital’s founder Jan Frederic Moermann and director Havard Chi, as well as Saha Anshuman Manabendranath, who previously worked at IT consulting company Pan Asia Resources.
All six candidates garnered a vote share of slightly more than 60 per cent in favour of their directorship. Their final appointment to the board remains subject to approval from the Monetary Authority of Singapore (MAS).
The three candidates nominated by the trustee, on the other hand, received a vote share of under 8 per cent at the meeting. They were independent real estate and investment consultant Chew Tuan Chiong, New Financial Holdings’ managing director of asset management Jimmy Chan, and independent adviser Sandip Talukdar.
Acrophyte Hospitality Trust saw the highest institutional inflow: SGX Research
In a 16 Oct report, SGX Research said in the prior 4 weeks, the iEdge S-REIT Index had declined 2.1%, after a rally anticipating the 50 bps rate cut on Sep 18, with a total 3Q24 gain of 17.5%.
“In 1H24, the S-REIT Sector saw S$1.07 billion in net institutional outflows. Since then, 16% of this has been reversed with net inflows in 2H24 up to October 15. The S-REIT Sector is now among the top four Singapore stock sectors for net institutional inflows since June 30’’ said SGX Research.
“After Mapletree Logistics Trust and Mapletree Pan Asia Commercial Trust led the net institutional outflow within the S-REIT Sector in 1H24, the latter has seen the highest net institutional inflow in the Sector since June 30. Mapletree Logistics Trust has seen the fifth highest net institutional inflow within the Sector, while Suntec REIT, Keppel DC REIT and Acrophyte Hospitality Trust make up the five trusts with the highest 2H24 to Oct 15 net institutional inflow’’.
It added that Acrophyte Hospitality Trust saw the highest 2H24 to Oct 15 net institutional inflow relative to market cap, driven by transactions associated with its significant rebrand after the acquisition of 19% the stapled securities of ARA US Hospitality Trust from ARA Real Estate Investors 23 Pte Ltd on July 9.
Sep’s NODX disappointed at 2.7% growth, dragged down by electronics
Singapore’s non-oil domestic exports (NODX) grew 2.7% year on year in September, extending the 10.7% jump in the previous month, but missed private-sector economists’ expectation of a 9.1%, as indicated in a poll by Bloomberg.
On a seasonally adjusted monthly basis, NODX rose 1.1% – a turnaround from the previous month’s 4.7% decline – to reach S$14.9 billion in September. This was higher than the previous month’s S$14.7 billion, and the average level a year ago.
The pullback in September’s NODX growth was due to a sharp moderation in electronics shipments, as well as slower growth in non-electronics exports.
Shipments of electronic products grew 4%, a significant slowdown from August’s 35.1% surge.
Investing with Insight: Watch this Week’s Technical Outlook