SIA and Singtel in focus: Weekly Review with SIAS

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss key developments in the global equity market and also share more about SIA and Singtel.

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

Weekly Market Review

1:57 - Macro Update

• The S&P 500 came down to 5,871 points on Friday, representing a 2.1% decline. The Dow Jones was also down by 1.2%.
• The Nasdaq was down by 3.1% due to losses led mainly by the tech stocks.
• The STI closed at 3,745, representing a 0.6% gain, driven by bank stocks.
• US core CPI increased by 0.3% compared to the previous month, in line with market expectations.
• US government bond yields continued to increase, with the 10-year bond yield reaching beyond 4.5%, which was the high in July.
• One further rate cut expected in December, although the probability of that has been decreasing over the past few weeks.
• There is potentially two further rate cuts in 2025, which will bring the US Federal Reserve target rate to 3.75% to 4%, from possibly 4.25% to 4.5% in December.

6:28 - Singapore market updates

STI Top performers:

• Jardine Matheson Holdings Ltd
• OCBC
• Keppel Ltd
• UOB
• Jardine Cycle & Carriage Ltd

STI worst performers:

• Seatrium
• Venture Corporation Ltd
• Yangzijiang Shipbuilding Holdings Ltd
• Singtel
• City Developments Ltd

7:53 - SIA

• SIA's share price dropped post-earnings, hitting a low of $6.20 before recovering slightly to $6.33.
• SIA's second-quarter earnings showed a 2% year-on-year revenue growth but faced a significant 14.7% increase in expenditures, leading to a 59% decline in both operating and net profits, missing market expectations.
• Passenger revenue fell by 1%, driven by a lower load factor (85.8% vs. 88.6% last year) and yield compression due to increased capacity and competition.
• While cargo revenue grew by 8.3%, its smaller contribution to overall revenue limited its impact.
• Rising fuel and non-fuel costs added to the profit decline, continuing a downward trend in operating profit since the previous fiscal year's peak.
• Despite these challenges, SIA maintained its interim dividend at 10 cents per share, and analysts anticipate the final dividend will remain stable.
• The stock is currently trading at 1.4x price-to-book ratio, suggesting potential value for investors. 

Read more: SIA net profit falls by 59% amid sharp cost increase: Our Quick Take 

Related Links:

• SIA share price history and share price target
• SIA  dividend history and dividend forecasts

13:32 - Singtel

• Singtel's latest earnings showed stable operating revenue and a 6% year-on-year increase in underlying net profit (9% without currency impacts).
• However, headline net profit declined sharply due to a $1.2 billion exceptional gain in the prior year. The Australian business outperformed expectations with strong mobile and enterprise margins, while the Singapore business remained stable.
• Growth businesses, such as NCS, saw a significant rise in operating profit due to digitalisation demand and cost optimisation.
• Singtel increased its interim dividend to 7 cents per share, including a value realisation component reflecting gains from capital recycling.
• The company narrowed its EBIT (earnings before interest and taxes) growth outlook to low double digits and reported a strong 27% EBIT growth for the first half of the year, affirming its progress in cost savings and dividend commitments.

Related links:

• Singtel share price history and share price target
• Singtel dividend history and dividend forecasts

19:34 - Technical Analysis

STI Technical Analysis

• The STI closed at 3,745, representing a 0.6% gain.
• Positive momentum, as indicated by the MACD histogram and RSI, has begun to fade, suggesting a slowdown in the uptrend.
• Expectations of fewer U.S. interest rate cuts next year have bolstered bank stocks but weighed on REITs, holding the STI below its high.

Dow Jones Technical Analysis

• The Dow Jones index closed at 43,445 points, representing a 1.2% decline.
• The MACD show significant momentum slowdown, with the MACD line nearing a crossover with the signal line, potentially confirming further downward movement.
• Historically, the Dow Jones often rebounds near the 50-day moving average, currently at 42,430 points, with additional support at the 100-day moving average. The 20-day moving average, at approximately 42,913 points also acts as a potential accumulation zone.

S&P 500 Technical Analysis

• The S&P 500 recently tested the upper bound of the Bollinger Band and is currently positioned just above the 20-day moving average at 5,860 points, with a closing of 5,871 points last Friday.
• The MACD indicator is nearing a crossover, which may confirm a short-term downtrend.
• The RSI is approaching the neutral 50 mark, indicating weakening momentum.

Nasdaq Composite Technical Analysis

• The NASDAQ Composite Index closed at 18,680 points, representing a 3.1% decline.
• It is now below the short-term moving average of 20 days, which is a negative sign.

What to look out for this week

• Monday, 18 Nov: CapitaLand Ascott Trust EGM
• Tuesday, 19 Nov: SGX Discovery Series with Beansprout: Navigating the landscape of European S-REITs
• Thursday, 21 Nov: 6-month Singapore T-bill auction, Nvidia earnings

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

Join our Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs.