Weekly recap: Navigating CPF changes, volatile rates and wild earnings

There was much discussion this week about the changes to the CPF system announced in Budget 2024. 

In particular, there were many questions on how closing the Special Account (SA) at the age of 55 will impact our retirement planning. 

To help you navigate these changes, we thought it might be useful to first understand the CPF Retirement Sum and what the various figures mean. 

Next, we also share more about the CPF LIFE scheme and how it provides us with monthly payouts regardless of how long we live. 

While reading up about these changes, what struck us the most is the importance of ensuring we have an adequate nest egg for our retirement. 

If you are looking to make your savings work harder, there will be an upcoming 6-month Singapore T-bill auction on 29 Feb. We find out if the yield will rebound further in the auction. 

Should you prefer to lock-in interest rates over a longer period of time, the good news is that our projections indicate the 10-year average rate on the next SSB may rise above 3% again.

We hope reading this newsletter will be a starting point for you to make your savings work harder!

🚀 NVIDIA LIFTS THE STOCK MARKET

What happened? 

Nvidia’s share price surged after the company reported stronger than expected revenue and earnings in the fourth quarter. 

The company also said revenue for the current quarter would be better than expected. 

What does this mean?

Nvidia’s strong earnings performance reflects the strong demand for its graphics processing units (GPU) fuelling the artificial intelligence (AI) boom.

Nvidia’s total market capitalisation soared by $277 billion following the results, exceeding Meta’s one-day jump of $197 billion three weeks ago.

Why should I care? 

AI-related and tech stocks rose in tandem, driving the S&P 500 index to close at another record high.

💡 THE BIG IMPORTANT STORY

Will CapitaLand Ascendas REIT lose its resilience after dividend cut?

We find out if the REIT can stay resilient amidst sector headwinds.

🚗 WHAT'S MOVING

• UOB reported a net profit of S$1.4 billion in the fourth quarter of 2023, an increase of 21.8% from the previous year. Excluding one-off Citigroup integration expenses, its core net profit would be in line with expectations. The company has proposed a final dividend of $0.85 per share, which will bring its total dividends in 2023 to S$1.70 per share. 
• Singapore Airlines reported an operating profit of $609 million for the third quarter of fiscal year 2023/24 ended 31 Dec 2023, a 19.3% decline compared to the previous year. While passenger volume continues to rise, weaker passenger load factors, cargo demand as well as rising costs have eroded its profitability. Read our analysis here. 
• Genting Singapore reported net profit of S$335 million for the second half of 2023, a 31% increase compared to the previous year. This was driven by a strong revenue increase with the post-pandemic recovery. A final dividend of 2 cents per share was proposed for the full year, unchanged from the previous year. 
• iFast reported a net profit of S$13.2 million for the fourth quarter of 2023, a sharp increase compared to S$1.3 million the year before. The higher profit was driven by initial contributions from the ePension division, and improvements in its wealth management platform.
• Grab’s share price fell after the company’s revenue forecast for 2024 came in below analysts’ expectations, suggesting a deeper than anticipated slowdown. The disappointing forecasts overshadowed plans to buy back as much as $500 million of stock and its second straight quarterly profit on an adjusted basis. 

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

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 26 Feb: Seatrium, Cromwell European REIT results, SSB application closing date
• Wednesday, 28 Feb: OCBC, CapitaLand Investment, City Developments results
• Thursday, 29 Feb: SATS, ST Engineering, ComfortDelgro results, Singapore 6-month T-bill auction

Source: Bloomberg, SGX 

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