Weekly recap: T-bill yield jumps and SSB demand rises

There was plenty of good news for savers in the past week with higher interest rates. 

Firstly, we saw the yield on the 6-month Singapore T-bill jump to 4.07%, significantly above the previous cut-off yield of 3.73%.

Next, all eligible applicants for the latest Singapore Savings Bonds were able to get full allocation even as the 10-year average return rose to the highest level this year. 

However, the higher bond yields have meant further weakness in the share price of REITs, with many hitting a multi-year low. We analyse if the sell-off presents a buying opportunity for Mapletree Pan Asia Commercial Trust and OUE Commercial REIT.

Lastly, for users impacted by TD Ameritrade’s announcement that it will stop serving retail investors in Singapore, we look at what are some of the alternatives available. 

🛢 OIL PRICES SURGE

What happened? 

Oil prices climbed to the highest level this year, reaching a high of above $95 per barrel. 

What does this mean?

The recent spike in oil prices was a result of Russia and Saudi Arabia’s announcement that they will extend production cuts through the end of 2023. 

On the other hand, oil demand has remained resilient despite concerns about a global economic slowdown.

Higher oil prices led to concerns that inflation may remain elevated and global central banks will have to keep interest rates higher for longer. Government bond yields rose further as a result. 

Why should I care? 

According to the International Energy Agency (IEA), the extension of output cuts will “lock in a substantial market deficit” into the fourth quarter of this year.

Companies in oil and gas related segments including oil exploration and production, as well as offshore marine services may benefit from an increase in oil prices.

Read our analysis on PTTEP, one of the leading oil and gas companies in Southeast Asia.

💡 THE BIG IMPORTANT STORY

Venture Corp near multi-year lows. Is it a bargain?

Venture Corp saw its share price hit a year-low recently amid a flurry of headwinds.

🚗 WHAT'S MOVING

• Venture Corp fell 5.4% in the past week to a 1-year low, driven by concerns about its exposure to the electronics sector. Click here for Venture share price and analysis.
• OUE Commercial REIT gained 6.8% in the past week, rebounding from a one-year low. Click here for OUE Commercial REIT share price and analysis.
• Frasers Centrepoint Trust has announced the proposed divestment of 143.9 million units in Hektar REIT for $37.4 million. Following the divestment which is expected to be completed in 4Q23, FCT will hold around 2.12% of Hektar REIT. Click here for Frasers Centrepoint Trust share price and analysis.
• Nio said that it currently has no “reportable capital raising activity” in response to media reports that the company is considering raising capital from investors. 
• Alibaba (BABA) said in a regulatory filing that it plans to list its logistics unit Cainiao on the Hong Kong Stock Exchange. Upon completion of the spinoff, Alibaba will continue to hold more than 50% of the shares of Cainiao. 

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

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Tuesday, 3 Oct: SIAS Corporate Connect: Thakral Corp
• Friday, 6 Oct: US Nonfarm Payrolls data

Source: Bloomberg, SGX 

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