Singapore Pre-Market Wednesday: Positive sentiment from Wall Street, SPH and Noble in focus

Singapore one dollar bill

Singapore’s market may start Wednesday on the front foot after U.S.-China trade war tensions stepped down a notch.

That was after U.S. President Trump appeared to accept Chinese President Xi Jinping’s speech at the Boao forum at face value. Rather than ratcheting up tensions, Xi used the speech to promise, largely as he has previously, to open up China’s markets to freer trade, including protecting intellectual property and lowering some tariffs.

For his part, Trump took to Twitter to thank Xi for his “kind words on tariffs” and his “enlightenment” on intellectual property issues. But some key constituencies in the U.S., such as farmers, remain on edge.

The lower tensions helped to propel Wall Street higher, with the Nasdaq rising 2.07 percent, the S&P 500 up 1.67 percent and the Dow Jones Industrial Average adding 1.79 percent. However, U.S. futures were nosing down, suggesting the rally might not continue.

Analysts have warned this isn’t likely the end of the road for the trade rhetoric.

“There is a mild risk-on tone across global markets that may be more about expressing relief that Chinese President Xi Jinping’s address last evening didn’t ratchet the protectionist rhetoric any higher than anything more constructive,” Derek Hold, head of capital market economics at Scotiabank, said in a note on Tuesday. “Xi didn’t offer anything new or substantive that would appease the concerns of the U.S. administration and so it’s still game on for protectionist sentiment on the path to further U.S. duties and investment restrictions and for concomitant market volatility.”

Also helping to ease market jitters, Facebook CEO Mark Zuckerberg testified before Congress, making contrite statements and saying he would make reforms on how his company handles personal data. That helped to boost Facebook shares.

But U.S. political fears continue to simmer in the background after Special Counsel Robert Mueller’s and federal prosecutors’ highly unusual pursuit of records from Trump’s personal attorney. Additionally, the White House’s figurative revolving door took another spin; this time, the top homeland security adviser, Tom Bossert, is resigning.

While it grabbed fewer headlines, analysts were also eyeing U.S. data.

Kathy Lien, managing director of BK Asset Management, said in a note on Wednesday that U.S. producer prices rose more than expected, which likely set the stage for consumer price data to show a rise.

“Data continues to take a backseat to political headlines but the FOMC minutes could remind the market that the Fed is optimistic and looking to raise interest rates a few more times this year,” she said. “With that in mind, the greatest risk is still headline risk and at any moment, President Trump could raise or ease the trade war stakes.”

  • SPH reported its net profit for the first half of 2018 rose just 1.4 percent on-year to S$100.6 million; group operating revenue fell 4.6 percent on-year to S$492.5 million. Revenue for the media business fell 10.9 percent to S$329.5 million, while in the property segment, which accounts for 60 percent of group profit, revenue was stable at S$121.7 million. That compares with a UOB KayHian forecast from March for full-year net profit of S$209 million.
  • ComfortDelGro will acquire AZ Bus’ private bus chartering assets for S$10.25 million. The assets include existing charter contracts and 94 buses; that will increase ComfortDelGro’s fleet to 300 buses, plus 160 buses with subcontractors, the taxi operator said in an SGX filing on Tuesday. The company noted that AZ Bus operates private charter, school bus and tour bus services, with customers including multinational companies and various local companies, including in the oil and gas, manufacturing and hospitality sectors.
  •  Noble’s restructuring deal could face a hiccup as Richard Elman, the company’s founder and largest shareholder, is pushing the commodity trader’s creditors to modify the deal to give equity holders a larger stake, according to a Business Times report citing people familiar with the matter.