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Weekly Sprout

The best deal this Lunar New Year

21 Jan 2023

Tech rally continues, Netflix surprise & T-bill auctions

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Amidst all the Lunar New Year preparations, we’ve received many questions about the various government bond auctions that are going on this month. 

This week, we had the 6-month T-bill auction which closed with a lower cut-off yield of 4.0%. 

We looked at the numbers and noticed that there were a significant amount of bids made at fairly low yields. 

The findings here can definitely help us to make a better decision in the upcoming 1-year T-bill auction.

What does this mean for the 10-year SGS bond then? We compare it to the Singapore Savings Bonds to find out! 

We hope these analyses will save you some time from pondering over the holidays, and that you will enjoy your reunion with family and friends. 

Wishing you a healthy and prosperous year of rabbit! 

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Source: Bloomberg. Price as of market close on 20 Jan

 

💻 What's next for Tech

What happened? 

Microsoft and Google parent Alphabet announced significant job cutsjoining other tech companies in downsizing following a post-pandemic boom. 

What does this mean?

Investors seem to be taking the layoffs in stride, as expectations of slowing interest rate hikes has helped to allay concerns about the bleak outlook portrayed by tech executives.

Sentiment was further lifted as Netflix started the earnings season with a stellar set of subscriber numbers. 

Why should I care? 

The tech-focused NASDAQ closed positively for a third consecutive week, continuing a tech rally which has led to a year-to-date gains of 7.3%.  


 

🚗 MOVING THIS WEEK

  • Netflix (NFLX) added 7.7 million subscribers in the fourth quarter as its new ad-supported tier accelerated growth. Founder Reed Hastings also announced that he will be stepping down as CEO, while remaining as the Chairman of the company.   
  • Goldman Sachs (GS) reported weaker than expected fourth quarter earnings, as its investment banking revenue plunged with a slowdown in corporate activity. 
  • SATS’ shareholders approved the company’s plans to acquire global cargo handler Worldwide Flight Services. The acquisition is now pending regulatory approvals and is expected to be finalized in March or April.
  • Suntec REIT has reported a 9.7% decline in distribution per unit in 2H22 compared to the same period last year due to higher financing costs. 

Source: Bloomberg, CNBC, Financial Times, Business Times, Edge Singapore

 


 

💡 THE BIG IMPORTANT STORY

Should you buy the 10 year SGS bond? Here’s why we prefer the SSB.

The SSB has a higher 10 year average interest rate compared to the 10 year SGS bond currently, offers capital protection and more flexibility.

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🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

  • Monday, 23 Jan: Singapore Lunar New Year Holiday 
  • Tuesday, 24 Jan: Singapore Lunar New Year Holiday 
  • Wednesday, 25 Jan: Singapore CPI, Boeing, AT&T earnings
  • Thursday, 26 Jan: Singapore Saving Bonds Closing Date, Singapore 1-year T-bill auction, US GDP, American Airlines earnings
  • Friday, 27 Jan: Singapore 10 year SGS bond auction

Source: Bloomberg, SGX 

 


 

🍭 THAT’S INTERESTING

What’s after FTX?

The founders of bankrupt crypto hedge fund Three Arrows Capital are attempting to raise US$25 million for a new crypto exchange called GTX that will specialise in trading crypto claims. There were numerous comments on Twitter which pointed out the similarity between GTX’s name and FTX, the crypto exchange that collapsed in November. 

Source: Bloomberg

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