Your bite-sized weekly update (1 Oct)

By Beansprout • 01 Oct 2022 • 0 min read

The falling pound, property cooling measures and SATS' costly purchase

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THIS WEEK IN MARKETS

One of the few things that’s back to normal is the downtown crowd with the F1 Singapore Grand Prix in full swing. 

The financial indicators we’re tracking are anything but normal, with a number of worrying developments.

  • The US 10-year government bond yield briefly went above 4.0%, before falling back to close at about 3.83% at the end of the week.

  • The yield on the UK government bond, or GILTS, was on course for its sharpest monthly rise since at least 1957 before the Bank of England stepped in to intervene.

  • The Chinese onshore yuan fell close to 7.2 per US dollar, a level it hasn’t reached since 2008. 

Closer to home, it was also an eventful week with SATS’ share price plunging after it announced a rights issue with the acquisition of the world’s largest air cargo handling. 

Not missing a beat, the Singapore government announced more measures to cool the red-hot property market. 

The week ahead is light for both economic and earnings releases. But it doesn’t look like the volatility will be going away anytime soon. 

If adrenaline is your thing, enjoy the F1 weekend! 

IMPORTANT

Stock Market Update
Source: Bloomberg. Price as of market close on 30 Sep
  • Too hot. The Singapore government has announced a latest set of cooling measures to bring down property demand as interest rates rise sharply. Amongst the changes announced, the maximum loan quantum limits for housing loans will be tightened. Read our analysis here.

ICYMI

  • Grab (GRAB) is targeting to break even on the basis of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the second half of 2024.

  • Nike (NKE) reported a 44% increase in inventories for its latest quarter, and said it would offer more discounts heading into the holiday season. 

  • Berkshire Hathaway Inc (BRK.A) acquired another 5.99 million shares of Occidental Petroleum Corp (OXY), boosting its holdings to 20.9%.
  • Porsche AG started trading in Frankfurt after the sports-car maker’s initial public offering was priced at the top end of the offer range. 

  • Li Auto (LI) cut its third-quarter delivery guidance by 2,500 vehicles or 9%. The company said the downward revision was due to supply chain constraints.

  • SATS is acquiring Worldwide Flight Services (WFS) for €1.177 billion (about S$1.6 billion). This will be funded by an equity fundraising of S$1.7 billion. Read our analysis here.
  • One of the subsidiary of Nanofilm Technologies entered into a joint venture with two Chinese companies to provide coating solutions for advanced battery components and systems in electric vehicles, as well as energy-storage applications in China.
  • In the latest 6-month Singapore Treasury bill auction on 29 September, the cut-off yield stayed at 3.32%, unchanged from the previous auction. Read our analysis here

Source: Bloomberg, CNBC, Business Times, Edge Singapore

THE BIG IMPORTANT STORY

Earn a potentially higher interest rate on your CPF OA by buying the T-bill. Is it worthwhile?

With interest rates rising, should you invest in the SGS bond and T-bill using your CPF to earn a higher return?

Interest rates rising

WHAT’S UP THIS WEEK

Friday, 7 Oct 

  • US: Non-farm payroll data

Get the full economic and Singapore earnings calendar on the SGX Academy

Source: SGX, Bloomberg, Refinitiv

THAT’S INTERESTING

  • Fortune favours the bold. The marketing of crypto platforms is making a comeback with the F1 race this weekend. The MAS prohibits cryptocurrency platforms from marketing or advertising their services to the public. However, the logos on sponsored F1 teams are exempt from these guidelines. (Source: Business Times)

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