Weekly recap: No Swift way to build wealth as fixed deposit rates falls

The news this week was all about Taylor Swift.

We also sent our intern down to Stadium to find out how much her fans spent on her tickets. (You can catch the video on our Instagram or Tiktok)

Not surprisingly, all of them shared that it was “so worth it”.

So as I was doing my usual jog around the Stadium this week, it struck me that every one may view money and wealth differently. 

And to some, catching their favourite singer live may just be the most priceless experience of a lifetime. 

If you are looking to grow your wealth to achieve your life goals, you may have realised by now that there is no swift way. 

Take fixed deposit rates for example. After climbing last year, they have come down in recent months with the best 6-month fixed deposit rate now only at 3.35% p.a. 

Against this backdrop, we share our thoughts on what to expect for the upcoming 6-month T-bill auction on 14^th March.

For investors who might be holding on to DBS, UOB or OCBC for their dividends, we compare their latest results to find out which of the three Singapore bank stocks look most attractive. 

As the Taylor Swift Eras tour in Singapore comes to an end, I'll be spending some time over the weekend thinking about what wealth truly means.

⏰ NOT FAR FROM RATE CUTS

What happened? 

US Federal Reserve Chairman Jerome Powell said that the central bank is getting close to the confidence it needs to start cutting interest rates. 

Powell said that “We are waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession.”

What does this mean?

The comment reflects Powell’s belief that the strong economic data is unlikely to impact the moderation of inflation in the US.

US government bond yields fell following Powell’s comments, with the 10-year US government bond yield declining to 4.1% from 4.3% at the end of February.

Investors also increasingly expect a faster pace of interest rate cuts, with the CME Fedwatch Tool indicating a higher probability that there will be five rate cuts this year. 

Why should I care? 

Singapore REITs rebounded slightly with the fall in government bond yields, with Mapletree Industrial Trust, and CapitaLand Integrated Commercial Trust (CICT) outperforming the Straits Times Index (STI).

Did you know that CICT was also one of the few Singapore REITs that managed to raise dividends in 2023 despite industry headwinds? Find out which are the other ones in our article here. 

🚗  MOVING THIS WEEK

• Sea Limited reported a loss of US$111.6 million in the fourth quarter of 2023, reversing from the profit of US$422.8 million the previous year, but above market expectations for an even wider loss. An increase in profit by SeaMoney was offset by weaker performance for Shopee and Garena. Sea expects Shopee’s 2024 gross merchandise value growth to be in the “high teens”. Read our analysis here. 
• Apple was hit by a 1.8 billion euro antitrust fine by the European Commission for abusing its dominant position in the market for the distribution of music streaming apps.
• Chinese electric vehicle (EV) maker Nio reported a loss of 5.6 billion yuan in the fourth quarter of 2023, narrower than the previous year. Nio’s revenue of 17.1 billion yuan exceeded the company’s guidance, driven by a modest decline in the average selling price of its vehicles. 
• Digital Core REIT has proposed the acquisition of a further 24.9% stake in a data centre in Germany for a purchase consideration of EUR 117 million (S$170.65 million). The REIT intends to fund the acquisition with proceeds from the sale of its Silicon Valley properties and a portion of the proceeds from its private placement in 1QFY2024. 
• Great Eastern Holdings’ minority shareholders have proposed three resolutions to be tabled at the insurance provider’s upcoming annual general meeting (AGM). The resolutions are calls to withhold directors’ fees, to change the share option schemes of employees, and to appoint an independent financial advisor (IFA).

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 THE BIG IMPORTANT STORY

DBS rises more than UOB and OCBC after dividend hike. Still a better buy?

We find out what is driving greater investor optimism on DBS’ prospects.

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Tuesday, 12 Mar: US Consumer Price Index (CPI) data, SIAS Corporate Connect with UOB
• Wednesday, 13 Mar: Seedly x Heartbeat @ Bedok: Money Makes My Heart Go 'Bedok Bedok'
• Thursday, 14 Mar: Singapore 6-month T-bill auction

Source: SGX, Bloomberg, Refinitiv

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