Singapore Pre-Market Monday: Keppel, Hyflux likely in focus amid jittery trade

Singapore 50 dollar bill

Singapore’s market may be jittery on Monday after Wall Street tumbled on Friday, hit by a double whammy of the Trump administration’s escalating trade-war rhetoric and disappointing job growth figures.

The Dow Jones Industrial Average tumbled 2.34 percent, the S&P 500 lost 2.19 percent and the Nasdaq shed 2.28 percent on Friday, offering an inauspicious omen for Asian trading on Monday.

But U.S. futures were indicating Wall Street may rise at the open later in the global day, potentially as U.S. President Trump’s advisers tried to offer reassurances over the weekend that they didn’t expect China to actually impose retaliatory tariffs.

Analysts pointed to jitters ahead.

“While the market base case scenarios remain no full out escalation, last week’s ruckus does suggest both sides are floating more than just ‘trial balloons’ so investors remain incredibly jittery as China my not ‘blink first,'” Stephen Innes, head of trading for Asia Pacific at OANDA, said in a note on Monday, noting that White House advisers were trying to make reassuring noises.

But he added, “the never-ending chop logic of trade war rhetoric is likely to grumble on for the foreseeable future, with most of the impact on equities.”

While Innes noted most currency traders expect the U.S.-China rhetoric will end up with in concession, “to a tee, all are aware that the tail risk for escalation remains ‘ginormous.'”

  • Shares of Keppel and upstream oil and gas company KrisEnergy may be in focus after inking a cooperation agreement. According to an SGX filing early Monday, Keppel and its subsidiaries Keppel FELS and Keppel Shipyard will be the preferred contractor for any work related to newbuilding, repair, upgrading and conversion of a range of marine assets and vessels as well as for using Keppel’s marine assets, vessels and services.
  • Hyflux said in an SGX filing on Friday that a subsidiary landed a contract valued at around 68.7 million euros, with the prospect of an additional 10.5 million euros for optional add-on work. The contract was with Asia Water Development Engineering Company to design, build and supply a seawater reverse osmosis desalination package in Iran. The contract, which would be fulfilled over the next two to three years, was expected to contribute to Hyflux’s earnings in the current financial year, the release said. The contract size compares with Hyflux posting a full-year net loss of S$116.4 million for 2017 on weak electricity prices in Singapore.
  • Plantation shares may be in focus as the Trump administration’s trade war threats have spurred retaliatory threats from China to impose a 25 percent tariff on imports of U.S. soybeans. Analysts expect that might create higher demand for crude palm oil, which would at least temporarily benefit some palm oil producers.