Singapore Pre-Market Thursday: Malaysia’s shock election, APAC Realty, Noble, Hyflux

Singapore 50 dollar bill

Singapore’s shares will open to uncertainty on Thursday after Malaysia’s shock election outcome returned the 92-year-old Mahathir Mohamed to power.

Concerns over the U.S. violation of the Iran nuclear pact were also set to continue to play out, with oil-related shares potentially getting a boost from crude’s continued rally.

Malaysia, among Singapore’s largest trading partners, will be on a national holiday for Thursday and Friday and its markets will be closed after the shock election outcome ended the ruling party’s 61 years in power.

“Financial markets are likely to react badly to the result when they open,” Capital Economics said in a note on Thursday, noting forward markets were pricing in a sharp drop in the ringgit and stock market.

It pointed to “far-reaching consequences for the economy,” noting that Malaysia’s fiscal position was likely to deteriorate if Mahathir fulfills his campaign pledge to scrap the goods and services tax as well as other spending pledges.

Among other regional markets, the Nikkei 225 index rose 0.44 percent by 8:13 A.M. SGT.

The Dow Jones Industrial Average rose 0.75 percent, the S&P 500 added 0.97 percent and the Nasdaq tacked on 1.00 percent on Wednesday. Futures for the three indexes were nosing lower.

Gains on Wall Street were driven by the energy sector after U.S. President Trump’s decision to violate the multi-lateral pact with Iran to prevent the Middle Eastern country from developing nuclear weapons. That decision sent oil prices, already high on supply concerns, pushing even higher.

Oil prices extended gains, with Nymex WTI futures up 0.48 percent at US$71.48 a barrel at 7:55 A.M. SGT on Thursday, while Brent ICE was up 3.15 percent at US$77.21 at 5:58 A.M. SGT, according to Bloomberg data.

The impact on U.S. consumers may be deepened by the Trump administration’s move to scrap Obama-era fuel-efficiency requirements for cars as well as the popularity of SUVs, which are less fuel efficient. Fewer smaller cars are set to be available for U.S. consumers as Ford is discontinuing most of its passenger car lineup.

In the U.S., producer price data on Wednesday showed prices were only up a tad 0.1 percent in April. But Reuters reported the slowdown was likely temporary as manufacturers were paying more for raw materials and oil prices were set to rise further.

The dollar index, which measures the greenback against a basket of currencies, was at 93.12 at 8:26 A.M. SGT, retreating from levels above 93.30  in the U.S. session, but off lows of around 92.85 touched during the overnight session.

APAC Realty

APAC Realty reported its first-quarter net profit rose 46.8 percent on-year to S$5.9 million, while revenue was up 56.7 percent on-year at S$105.23 million.

“The increase in revenue was largely attributed to the increase in brokerage income from the resale and rental of properties, and new home sales amounting to a total of approximately S$37.6 million,” the real estate brokerage operator said in a filing to SGX after the market close on Wednesday. “The group benefited from a recovery in the Singapore residential market, which experienced a substantial increase in transaction volume for the private secondary market.”

Noble

Noble indicated in a filing to SGX on Wednesday after the market close that news reports suggesting the company had reached an agreement with holders of its perpetual capital securities over its proposed restructuring were not accurate.

“The company continues to engage in discussions with stakeholders on the company’s proposed restructuring, including certain of the company’s senior creditors, shareholders and holders of the perpetual securities,” it said. “As at the date of this announcement however the company has not concluded any agreement with any holders of the perpetual securities in connection with the proposed restructuring.”

Hyflux

Hyflux reported a first-quarter net loss of S$22.2 million, compared with a “near breakeven” in the year-earlier quarter, due to a loss at the Tuaspring Integrated Water and Power Project.

Excluding Tuaspring, profit after tax and minority interests (PATMI) was S$1.0 million for the quarter, the water-treatment company said in a filing to SGX after the market close on Wednesday.

“The group’s performance in the next 12 months is still largely driven by the Singapore power market. While wholesale electricity prices have shown improvement in the last two months reducing losses for the group, a stronger rebound at a sustained pace is needed to turn the group profitable in 2018,” Hyflux said in its outlook statement.

China Aviation Oil (Singapore)

China Aviation Oil (Singapore) reported its first-quarter net profit rose 13.88 percent on-year to US$26.91 million, mainly on a higher share of profits from its associated companies, as SPIA’s contribution rose. SPIA is Shanghai Pudong International Airport Aviation Fuel Supply Company.

The largest physical jet-fuel trader in Asia also said that first quarter revenue rose 23.9 percent on-year to US$4.10 billion on higher oil prices and a 4.4 percent increase in total supply and trading volume for middle distillates and other oil products.

“We are heartened that CAO has continued to report a commendable financial performance in the first quarter of 2018, amidst the uncertainties in the macroeconomic environment, geopolitical tensions and volatility in oil prices,” CEO Meng Fanqui said in the statement to SGX after the market close on Wednesday. “This is testament to our strategy to pursue a global integrated value chain with diversification geographically and across product markets, supported by our investments in strategic oil-related businesses.”

CSE Global

CSE Global reported net profit for the first quarter jumped 90 percent on-year to S$5.7 million as revenue rose 23.7 percent to S$92.2 million, amid growth in the oil and gas and infrastructure segments.

“With the uncertain global economic outlook and low commodity prices, the operating environment remains challenging,” CEO Lim Boon Kheng said in the outlook statement. “The group will continue to support and service its existing installed base or customers as well as
explore available opportunities in the market together with Serba Dinamik.”

It noted that several large projects will reach billing milestones in the second and third quarters of this year, adding it expected to be profitable for the full year.

Cromwell European REIT

Cromwell European REIT reported net property income for the November 30, 2017, to end-March period was 27.004 million euros, 2.8 percent higher than its IPO forecast, while its distribution per unit (DPU) was 1.45 European cents, 3.5 percent higher than its IPO forecast.

Japan Foods

Japan Foods reported net profit attributable to equity holders for its fiscal fourth quarter rose 67.8 percent on-year to S$900,000, while revenue rose 6.5 percent to S$16.2 million. For the full fiscal year, net profit attributable to equity holders rose 24.0 percent to S$5.8 million.

“The stellar performance was driven mainly by strong contribution from the restaurants operating under the group’s flagship ‘Ajisen Ramen’ and ‘Menya Musashi’ brands as well as new contribution from its ‘Shitamachi Tendon Akitmitsu’ brand, which was launched in July 2017,” the company said in a filing to SGX before the market open on Thursday.

OUE Lippo Healthcare

OUE Lippo Healthcare reported a loss after tax of S$2.74 million for the first quarter, narrower than the S$11.17 million loss it reported in the year-earlier quarter. Revenue fell 6.1 percent on-year to S$9.84 million, it said in a filing to SGX on Wednesday after the market close.

It said revenue fell mainly due to lower revenue from the Wuxi New District Phoenix Hospital and the China drug distribution business. While revenue from the rental of Japan nursing facilities was stable in yen terms, it was lower when translated into Singapore dollars, it said.