Stocks surge but T-bill yield falls further: Weekly Recap

It’s hard to ignore the sharp decline in T-bill yields lately. 

This week, the cut-off yield for the 6-month Singapore T-bill fell to 3.34%, dipping just below the best Singapore fixed deposit rate of 3.4%. 

With T-bill yields dropping, it begs the question: are there still opportunities in the Singapore market for income investors? To find out, we’re diving into some commonly held income instruments, including the Straits Times Index ETF.

For many of us who focus on income investing, Singapore banks are often a go-to for their attractive dividend yields. 

The good news? All three local banks—DBS, UOB, and OCBC—have raised their interim dividends for the first half of 2024, now offering an average dividend yield of close to 6%. 

So, how do these three banks stack up against each other? We take a closer look at Singapore banks to find out where the best opportunities lie.

If you are looking for dividend ideas outside of Singapore banks, do also check out our Best Singapore Dividend Stocks Screener to uncover the top dividend-paying stocks in Singapore.

Happy growing!

Gerald, Founder of Beansprout

⏰ THIS WEEK IN MARKETS

🚀 Best Week

What happened? 

The US Consumer Price Index (CPI) rose by 2.9% in July compared to the previous year, representing the slowest pace of increase since 2021. 

Latest economic data also showed that US retail sales rose by 1.0% in July, the largest jump in 18 months. 

What does this mean?

The strong economic data and easing inflation led to increased optimism that the US economy may avert a recession. 

The moderation in inflation also made investors gain confidence that the Fed will cut interest rates in September.

According to the CME Fedwatch Tool, there is a 75% probability of a 0.25% rate and a 25% probability of a 0.5% rate cut in September. 

Why should I care? 

Global stocks posted solid gains, with the S&P 500 having its best week so far this year. 

The price of gold reached a record high of US$2,509/oz on rising expectations of interest rate cuts. 

Singapore stocks also traded higher, with gains in the STI led by companies which reported strong results recently, including ST Engineering and DBS. 

Singapore REITs also bounced with lower bond yields, with gains led by Keppel Pacific Oak US REIT, First REIT, and Digicore REIT. 

🚗  MOVING THIS WEEK

• Singtel 1Q25 underlying EBITDA and net profit grew 5.4% year on year, due to lower corporate expenses. 
• ST Engineering 1H24 net profit grew 20% year on year to S$337m, led by a turnaround in Urban Solutions and Satcom unit. It won new contracts worth S$6.1bn in 1H24, bringing orders on hand to S$27.9bn. 
• Capitaland Investment 1H24 net profit fell 6% year on year to $331m, as lower income from real estate investment more than offset higher fee income and portfolio gains.
• Capitaland Integrated Commercial Trust (CICT) reported distribution per unit of 5.43 cents in 1H24, an increase of 2.5% from the previous year. This was driven by a 5.4% increase in net property income. Read our analysis on CICT here.
• Yangzijiang Shipbuilding 1H24 net profit grew 77% year-on-year, lifted by improved shipbuilding margins and shipping freight rates.  Read our analysis on Yangzijiang Shipbuilding here.
• ComfortDelgro reported a net profit of S$95.3 million in 1H24, an increase of 21.4% year-on-year. The company’s revenue rose by 13.7% with new acquisitions and increased contributions from its taxi/private-hire vehicle business. The company announced an interim dividend per share of S$0.0352. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 THE BIG IMPORTANT STORY

DBS, UOB and OCBC raise dividends in 1H24. Which is a better buy?

DBS, UOB and OCBC raised their dividends in their recent 1H24 earnings. We find out why DBS' share price has risen more than UOB and OCBC year-to-date, and if it is still a better buy.

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Tuesday, 20 Aug: SIAS Corporate Connect with Cromwell European REIT
• Thursday, 22 Aug: SGX Discovery Series with Maybank Securities: Singapore Market Outlook and Small-Mid Cap Gems
• Friday, 23 Aug: Singapore Consumer Price Index (CPI) data 

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

Source: SGX, Bloomberg, Refinitiv

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