Weekly Recap: DBS, OCBC and Seatrium shares gain with positive news

By Gerald Wong, CFA β€’ 01 Jun 2024 β€’ 0 min read

We also find out what to expect for the upcoming Singapore T-bill auction.

what happened in the markets 1 june 2024
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I recently had my second Covid infection. 

Having recovered from the infection, I continued to have a persistent cough that made it difficult for me to attend some of my speaking engagements. 

So I went to see a sinseh with the hope of recuperating faster. What surprised me was that the bill came up to close to $200 for the consultation and a week of medication! 

It is no wonder that Traditional Chinese Medicine company Eu Yan Sang International was recently acquired at a valuation of S$800 million. 

However, they are not the only company that has caught the attention of investors recently. 

Singapore banks have also done well this year, with DBS and OCBC reporting record net profits. We find out what are their prospects in the coming quarters. 

This week, Seatrium announced a S$11 billion order from Petrobras, which boosted its share price. We analyse its latest business update to find out if it is poised for a recovery.

Sea Limited shares have also jumped this year with an improvement in the performance of its e-commerce business Shopee and its gaming business Garena. We look at what is driving increasing investor confidence in the stock. 

While it was a busy week, I managed to get some rest and the medication has helped me feel better. 

However, it was also a timely reminder for me to revisit my financial plan to make sure it has taken into consideration rising healthcare costs.

Have a good weekend!

Gerald, Founder of Beansprout

⏰ This week in markets

what happened in the markets 1 june 2024
Source: Bloomberg. Price as of market close on 31 May 2024

 

😨 Fed remains worried about inflation

What happened? 

Minutes from the latest Federal Reserve meeting indicated that officials remain worried about the lack of progress on inflation.

This follows several months of stronger than expected inflation data earlier in the year. 

What does this mean?

As a result, Fed officials noted that they lacked the confidence to go ahead with interest rate cuts. 

According to the CME Fedwatch Tool, investors are now just expecting just one interest rate cut by the Fed this year.

Why should I care? 

US government bond yields climbed on rising expectations that interest rates may stay higher for longer. We find out what this may mean for the upcoming 6-month Singapore T-bill auction. 

The S&P 500 fell with the higher bond yields, despite the continued strong performance of Nvidia. 

Singapore stocks were lifted by Yangzijiang Shipbuilding and Seatrium, which announced an increase in their order books. 

However, this was partly offset by a selloff in Jardine Cycle & Carriage, City Developments, and Mapletree Logistics Trust which were removed from MSCI Singapore.

πŸš—  MOVNG THIS WEEK

OCBC aims to invest HK$1.5 billion (S$259 million) into its technology and facilities in Greater China - which includes the China, Hong Kong, Macau and Taiwan markets - over the next three years. The investment comes as OCBC works towards its goal of adding S$3 billion in revenue from its Asean-Greater China strategy by 2025. 

A Singtel-KKR consortium is a frontrunner to buy a minority stake of US$1 billion in STT Global Data Centres, reported Reuters on May 28. STT GDC operates datacentres in markets ranging from Singapore, the UK, Germany, India, Thailand, South Korea, Indonesia, Japan, the Philippines, and Malaysia. 

Seatrium has won the tender from Petrobras for the newbuild supply of Floating Production Storage and Offloading vessels platforms P-84 and P-85. The contracts are valued at S$11 billion. Work will commence in first quarter of 2025 with final delivery expected in 2029. With the orders, the company reported an increase in its net order book to S$25.8 billion.

Yangzijiang Shipbuilding secured US$3.32 billion new orders year-to-date, bringing its orderbook to record US$16.08 billion comprising 193 vessels. These will be delivered between 2024-2028. About 54% of the new orders are green vessels. 

SATS FY24 turned around to a net profit of S$56.4 million, as its 4Q24 net profit of S$32.7 million rose 3.8% over 3Q24. The company resumed paying out dividends with a proposed dividend per share of 1.5 cents. 

Mapletree Pan Asia Commercial Trust is divesting office building Mapletree Anson for S$775 million, 1.3% above valuation. The transaction will lower gearing from 40.5% to 37.6%, and lift DPU by 1.5% if it was completed at end March 2024. 

Mapletree Industrial Trust (MINT) CEO Mr Tham Kuo Wei will be transferred to the sponsor, Mapletree Investments Pte Ltd. He will be replaced by current CFO Ms Lily Ler. Ms Khoo Geng Foong from Mapletree Logistics Trust will assume the CFO role at MINT.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

πŸ’‘ THE BIG IMPORTANT STORY

Will the T-bill yield drop below 3.65% in the auction on 6 June?

The closing yield on the 6-month Singapore T-bill remains at 3.65% even though US bond yields have climbed.

6-month singapore t-bill auction 6 june 2024.jpg

πŸ€“ WHAT WE’RE LOOKING OUT FOR THIS WEEK

  • Thursday, 6 June: Singapore 6-month T-bill auction, NIO earnings, European Central Bank (ECB) meeting

  • Friday, 7 June: US Nonfarm Payrolls data 

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

Source: SGX, Bloomberg, Refinitiv

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

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