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Weekly Sprout

It's a complete failure

19 Nov 2022

FTX contagion, T-bill bidding tips & latest deposit war

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⏰ THIS WEEK IN MARKETS

If you have some money sitting around in your bank or CPF account, there are now more options for you to earn a higher interest rate. 

OCBC allows customers to make a 12-month fixed deposit with their CPF OA funds and earn 3.4% per annum. 

UOB is offering a promotional interest rate of 3.55% p.a. for fixed deposits of S$10,000 and above.  

According to the Beansprout community, DBS has a promotional interest rate of 3.80% p.a. for five months. 

Such higher fixed deposit rates definitely offer an alternative to the T-bill, after some investors were not able to get their full allocation in the previous auction. 

In this week’s feature story, we discuss how you can bid for the T-bill like a Pro!

Don’t forget to share our strategy for bidding to T-bill with your friends before the upcoming auction on 24 November!  

Source: Bloomberg. Price as of 18 Nov

 

⚠️ Worse than Enron

What’s going on here?

Temasek will write off its US$275 million (S$377 million) investment in FTX, “irrespective of the outcome of FTX’s bankruptcy protection filing”.

What does this mean?

  • The total cost of Temasek’s investment in FTX was 0.09% of its net portfolio value of S$403 billion as at end-March. 
  • Temasek said that it conducted an extensive eight-month due diligence process on FTX, during which it reviewed the company’s audited financial statement. 
  • In a press statement, it added that “our belief in the actions, judgment and leadership of Sam Bankman-Fried … would appear to have been misplaced.”

Why should I care?

  • FTX’s new CEO John Ray described a “complete failure of corporate controls”, identifying lapses in corporate governance greater than any other process he has managed in his 40 years as a bankruptcy specialist, including at Enron. 
  • FTX’s collapse continues to send shockwaves through the crypto industry, with Genesis Global Capital plagued by contagion concerns as its crypto lending arm suspended redemptions due to “extreme market dislocation”.

 

🚗  MOVING THIS WEEK

  • Sea (SE) narrowed its net loss to US$569 million in 3Q22 from US$931 million in 2Q22, due to a reduction in costs from employee cuts and more prudent spending on sales and marketing. Sea expects to achieve EBITDA breakeven for Shopee by end of 2023. 
  • Grab (GRAB) narrowed its net loss to US$342 million in 3Q22 from US$572 million in 2Q22, as it managed to achieve adjusted EBITDA breakeven in its Deliveries segment. The company revised up its FY22 revenue guidance to US$1.32-1.35 billion, from US$1.25-1.30 billion previously, driven by a strong recovery in its mobility segment. 
  • Alibaba (BABA) reported a 7% decline in customer management revenue compared to the previous year, due to weaker consumer sentiment in China. The company announced a US$15 billion expansion to its existing US$25 billion share buyback programme. 
  • Sembcorp Industries will acquire renewable assets in China, bringing its total renewable portfolio to 9.4 gigawatts (GW). The company remains committed to reaching 10GW of gross installed renewables capacity by 2025. 
  • ComfortDelgro reported weaker than expected 3Q22 earnings, as its overseas operations in UK and Australia were impacted by higher fuel and wage costs. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

 


 

💡 THE BIG IMPORTANT STORY

T-bills yields are falling! How to not “spoil market” when bidding for T-bills

We share how you can make competitive bids for the Singapore T-bill like a pro fund manager.

T-bill auction.jpeg

 


 

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

Source: SGX, Bloomberg, Refinitiv

 


 

🍭 THAT’S INTERESTING

Going Dry For World Cup

  • Beer will not be sold to fans around any of the eight World Cup stadiums, in a stunning U-turn just days before the start of the tournament. 
  • This leaves fans with just one “beer” choice – the Bud Zero, an alcohol-free lager that is marketed to taste similar to its best-selling alcoholic beverage. 

Source: Bloomberg

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