Your bite-sized weekly update (3 Sep)

By Beansprout • 03 Sep 2022 • 0 min read

Powell selldown continues, Buffett's BYD surprise, & Singapore's interest rate war

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THIS WEEK IN MARKETS

If you have some money to spare, you’d have noticed the higher interest rates that Singapore banks have been dangling. 

Just this week alone, OCBC raised interest rates on its 360 account to up to 4.05% per annum. UOB increased interest rates for its UOB One account shortly after. 

We also saw the highly anticipated launch of digital banks in Singapore. Users of Grab and Singtel’s “Gen Z digital bank” GXS can deposit up to S$5000 and earn daily interest of 0.08% per annum.

By now, you’d probably have received a promo code from a well-meaning friend for Stanchart and Fairprice’s digital bank, Trust Bank

But what caught our attention was the Singapore 6-month treasury bill’s interest rate of 2.99% per annum. 

This stands out especially as the interest rates on the latest Singapore Savings Bond (SSB) has fallen from the previous month. 

Confused by where you should be parking your spare cash? We’ve done all the work in reviewing them so you can let your money work harder for you. 

IMPORTANT

Stock market update
Source: Bloomberg. Price as of market close on 2 September

 

  • More jobs please. The US gained 315,000 jobs in August according to the latest nonfarm payroll data, slightly above market expectations. The unemployment rate rose to 3.7% from 3.5% in the previous month. 

  • Consumers can't stop spending. US consumer sentiment improved further in August and household’s near term inflation expectations fell to an eight-month low amid declining petrol prices, based on the University of Michigan survey.

  • Covid-zero. The Chinese city of Chengdu locked down its 21 million residents to contain a Covid-19 outbreak, which was seen as significant move as China's Western region has been less affected by the virus so far. 

  • Not as rosy. Singapore's private-sector economists shaved their 2022 growth forecast, citing the sharper-than-expected surge in inflation and the slowing economies of its trading partners as the key downside risks.

ICYMI

  • Nvidia (NVDA) warned it expects a sales hit of as much as US$400 million from new U.S. licensing requirements after restrictions were imposed on shipments of its most advanced chip to China. 
  • Warren Buffett’s Berkshire Hathaway Inc. reduced its stake in BYD Co. (HKG : 1211) even further, according to an exchange filing, just days after the legendary US investor began reducing his holding in China’s biggest maker of electric vehicles. Read our analysis here
  • Elon Musk sent a second deal termination notice for Twitter (TWTR) with additional reasons for pulling out, including the contention that allegations detailed in the recent whistleblower complaint could have severe consequences for Twitter’s business.

  • The latest Singapore Savings Bond is offering a lower interest rate than the previous month's issuance. The 1-year interest rate is 2.60%, and the average 10-year interest rate is 2.75%. Read our analysis here
  • The Singapore 6-month treasury bill offered an interest rate of 2.99% per annum in the latest auction on 1 September Read our analysis here
  • UOB raised interest rates for the UOB One account. Read our analysis here
  • OCBC raised interest rates for the OCBC 360 account. Read our analysis here

  • Grab (GRAB US) and Singtel (SGX: Z74) launched digital bank GXS Bank in Singapore to offer daily interest on savings account.
  • Standard Chartered and FairPrice Group launched digital bank Trust Bank to offer savings accounts and credit card products for retail customers.
  • ComfortDelGro (SGX: C52) will be removed from the Straits Times Index (STI) and replaced by the recently-listed Emperador (SGX: EMI) in the September review of the benchmark index. Read our analysis here

Source: Bloomberg, CNBC, Business Times, Edge Singapore

THE BIG IMPORTANT STORY

 Should you invest in the Chinese EV sector?

Chinese electric vehicle (EV) makers are leading the global EV race. We share how you can get a slice of the growing Chinese EV sector.

Should you invest in Chinese EV sector

WHAT’S UP THIS WEEK

Wednesday, 7 Sep

  • US: Nio Inc earnings 

Thursday, 8 Sep

  • US: Bilibili Inc earnings

Get the full economic and Singapore earnings calendar on the SGX Academy

Source: SGX, Bloomberg, Refinitiv

IN THE NEWS

  • Gaming losing steam? Sea Ltd. is trimming staff in its money-making gaming arm to rein in costs. It’s the e-commerce giant’s second round of job cuts this year, following a string of setbacks that is forcing the company to shift its focus away from  growth to profitability. (Source: Bloomberg)

Gaming losing steam?

 

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