T-bill yield falls and stocks retreat: Weekly Recap

Roger Federer played 1,526 singles matches throughout his career and won nearly 80% of them.

However, at a recent commencement speech, he asked the audience to make a guess on the percentage of points that he won across all the matches.

The GOAT (Greatest of all Time) shared that he won only 54% of the individual points within those matches. That's barely more than half of the points that he played!

The lesson I took away from this is that perfection is impossible, and you're bound to lose a point whatever game you choose to play in life. Of course, this applies to investing too. 

To me, diversification is key to ensuring that we stay in the game after losing a point. Just last week, I shared about the importance of diversification even in a bond portfolio. 

The allocation results of the Astrea 8 PE bonds were out, and what surprised some investors was that the Class A-2 bonds had a higher subscription rate compared to the Class A-1 bonds. Read our analysis of the Astrea 8 PE bonds allocation result here.

We also saw a further decline in the latest 6-month Singapore T-bill with a fall in US government bond yields. We find out if the upcoming 1-year Singapore T-bill auction might then be a better option compared to the 6-month T-bill taking into account reinvestment risks. 

If you are also thinking about how to build a diversified and resilient portfolio, join our upcoming seminar on “How to reach $100k by 30 – Levelling up with portfolio construction” on 23 July, where we will share practical tips on how you can achieve your $100k milestone by the age of 30. 

Happy growing!

Gerald, Founder of Beansprout

⏰ THIS WEEK IN MARKETS

⛔️ GEOPOLITICAL RISKS BACK IN FOCUS

What happened? 

The Biden administration warned allies that it could implement drastic trade restrictions on foreign chipmakers if they continue selling advanced chips to China, according to a Bloomberg report.

Presidential candidate Donald Trump also said that Taiwan, a hub for the global chipmaking industry, should pay for its own defence. 

What does this mean?

The comments were seen as a sign that the Biden administration is stepping up efforts to restrict China’s access to the advanced chips required to power artificial intelligence (AI) . 

This led to renewed concerns amongst investors about an escalation in US-China trade tensions. 

Why should I care? 

The S&P 500 fell and Straits Times Index (STI) fell with rising geopolitical risks, with losses led by chip-related and tech stocks. 

Apart from global macroeconomics, Investors are also likely to start focusing on company earnings with the start of the earnings season.

Singapore REITs will start reporting their results this coming week, with Mapletree Logistics Trust, Mapletree Industrial Trust and Keppel DC REIT earnings likely to be closely watched. 

🚗  MOVING THIS WEEK

• Singtel will back the amalgamation of Intouch Holdings and GULF, Intouch’s largest shareholder, which will simplify Singtel’s shareholding in its Thai associate AIS by removing Intouch as the intermediary holding company. Singtel will book an estimated gain of S$400 million from the amalgamation. 
• OCBC’s offer for Great Eastern Holdings (GEH) closed on 12 July with OCBC holding 93.52% of GEH. As a result, GEH will be suspended on 15 July, but GEH shareholders who did not accept the offer will have a right to require OCBC to buy them out at the offer price. 
• SIA reported a 7.2% year-on-year growth in passenger traffic in June, with demand driven by the mid-year school holidays and summer travel season. Cargo operations saw a load factor of 58%, up 6.4 percentage points from the year before.
• Yangzijiang Shipbuilding has entered into an agreement with the local government of Jingjiang City in China’s Jiangsu Province to acquire land for the setting up of a new clean energy ship manufacturing base. Yangzijiang Shipbuilding said it plans to invest an estimate three billion yuan (S$554.3 million) in capital expenditures over the next two years to complete this project. 
• Thai Beverage (ThaiBev) has proposed a share swap which will result in the company exiting the property business and becoming a pure play beverage company.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 THE BIG IMPORTANT STORY

3 Best-Performing Singapore REITs in the First Half of 2024

We feature the three best-performing REITs for the first half of this year - BHG Retail REIT, Cromwell European REIT, and Sasseur REIT.

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 22 July: US retail sales data
• Tuesday, 23 July: How to get to $100k by 30 seminar: Stepping Up With Portfolio Construction, Tesla, Alphabet earnings
• Wednesday, 24 July: Digital Core REIT, Mapletree Logistics Trust, OUE REIT, Frasers Centrepoint Trust earnings
• Thursday, 25 July: Singapore 1-Year T-bill auction, Suntec REIT, Mapletree Industrial Trust earnings
• Friday, 26 July: Singapore Savings Bonds (SSB) application closing date, Keppel Infrastructure Trust, Keppel DC REIT, CapitaLand Ascott Trust earnings

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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