Weekly Review with SIAS: Yangzijiang Shipbuilding, hospitality stocks in focus

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss the growing upward trend in the global equity market and also share more about the following:

• Yangzijiang Shipbuilding
• Singapore hospitality stocks, including Far East Hospitality Trust and CDL Hospitality Trust

Watch the video to learn more about what we are looking out  for this week.

Weekly Market Review

2:00 - Macro Update

• US stocks rebounded, with the S&P 500 at $5,350. Gains were led by tech stocks, with NASDAQ up 2.4%. In contrast, the Singapore STI declined by 0.2%.
• The key data point last week was the US non-farm payroll data, indicating a strong job market. In May, 272,000 jobs were added, much higher than in April and above expectations. This suggests the US economy remains robust, possibly delaying Fed rate cuts.
• Following the jobs data, the two-year US government bond yield rose to around 4.9%. This is close to its previous highs of nearly 5%, reinforcing the view that interest rates may stay elevated due to the strong economy.
• Investor expectations for Fed rate cuts have shifted. The first cut, previously expected in September, is now anticipated in November. Only one cut is expected this year, contrasting with earlier expectations of up to seven cuts. This indicates a more cautious outlook on rate cuts.

5:08 - Singapore market updates

STI Top performers:

• SATS share price
• Yangzijiang Shipbuilding share price
• Jardine Cycle & Carriage share price
• DFI Retail Group share price
• Mapletree Pan Asia Commercial Trust share price

STI Worst performers:

• OCBC share price 
• City Developments share price
• ST Engineering share price
• Genting Singapore share price
• Seatrium share price

6:35 - Yangzijiang Shipbuilding

• Yangzijiang Shipbuilding's share price surged from $1.70 in May to above $2.40 currently, showing strong performance over the past year.
• In 2023, the company secured $7 billion in orders. Yangzijiang Shipbuilding has secured $3.32 billion worth of order year-to-date, achieving 74% of its $4.5 billion target for 2024.
• Orders include a mix of container ships, LNG/LPG carriers, bulk carriers, and oil tankers, with over half being eco-friendly vessels.
• Increased demand for oil tankers is due to fleet renewal and longer sailing distances, while LNG/LPG carriers are in demand due to the global energy transition towards gas.
• The company's order book reached a record high of $16.1 billion, driving revenue visibility for the next few years.
• Revenue increased from 15 billion CNY in FY20 to 24 billion CNY in FY23, with a profit margin improvement from 13.8% in 2021 to 22.4% in 2023.

12:37 - Singapore Hospitality Stocks

• In May, tourist arrivals in Singapore declined to 1.28 million, following a peak in March driven by events like the Taylor Swift concert.
• Revenue per available room (RevPAR) declined to $217 in April, reflecting a slowdown in tourist arrivals post-March events.
• The moderation in tourist arrivals and RevPAR is impacting the share prices of hospitality REITs.
• Far East Hospitality Trust share price fell slightly from 68 cents to 62 cents year-to-date, while CDL Hospitality Trust share price also moderated in 2024 after a strong performance in 2023.

What to look out for this week

• Wednesday, 12 June: US Consumer Price Index (CPI) Data, 
• Wednesday, 12 June: US Federal Reserve Meeting
• Friday, 14 June: Bank of Japan rate decision

Get the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

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