Singapore’s shares may get a fillip on Friday after weaker-than-expected U.S. inflation data worked to dial back interest rate hike expectations from the U.S. Federal Reserve.
“U.S. equity markets raced to a seven-week high as traders reprice lower the more hawkish expectation from the Fed. Risk continues to trade symmetrical with U.S. interest rates, so Asia shares should open slightly higher on the back the Wall Street gains,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Friday.
The Dow Jones Industrial Average ended up 0.80 percent, the S&P 500 added 0.94 percent and the Nasdaq gained 0.89 percent. Futures were nosing downward early Friday.
The U.S. consumer price index for April came in lower than expected, increasing just 0.2 percent, while core CPI, which excludes food and energy prices, was up only 0.1 percent; a Reuters poll of economists had forecast 0.3 percent and 0.2 percent, respectively.
That weighed on the U.S. dollar, with the dollar index, which measures the greenback against a basket of currencies, at 92.72 at 7:49 A.M. SGT, off levels above 93.33 earlier in the week. The 10-year U.S. Treasury yield was at 2.97 percent at 8:04 A.M. SGT.
“For the moment, the inflation threat is simply not materializing,” Chris Rupkey, chief financial economist at MUFG, said in a note on Thursday. “This will take some wind out of the remaining Fed hawk’s sails and put some of those rate hikes out there on the horizon in jeopardy. Three rate hikes in 2018 and three rate hikes in 2019 may never happen if inflation doesn’t start to heat up later on this year.”
Oil prices remained on an uptrend, with Nymex WTI crude oil futures up 0.22 percent at US$71.52 at 7:52 A.M. SGT, while ICE Brent futures added 0.34 percent to US$77.47 by 5:59 A.M. SGT, according to Bloomberg data.
“Besides the fillip from the Middle East geopolitical flare-ups, the fragile supply and demand dynamics continue to tighten on the prospects of an ongoing collapse in Venezuelan output and impact of U.S. sanctions on Iran, which will be felt toward the end of 2018,” Innes said.
Genting Singapore reported its first-quarter net profit rose 3 percent on-year to S$217.29 million, while revenue was up 15 percent at S$675.11 million. The company noted there was a year-earlier one-off gain of S$96.3 million on the disposal of an investment in South Korea.
At the Singapore integrated resort, gaming revenue rose 17 percent on-year and 22 percent on-quarter to S$507.43 million, while non-gaming revenue rose 10 percent on-year and 3 percent on-quarter to S$167.11 million, the casino operator said in an SGX filing after the market close on Thursday.
“The ongoing strategy to focus on affluent regional business proved to be effective as the mass and premium mass business continued to deliver encouraging results. The Lunar New Year period saw bustling VIP rolling volume, notwithstanding a calibrated credit risk model,” the company said in the statement.
Wilmar reported net profit for the first quarter dropped 40.6 percent on-year to US$203.3 million, while revenue rose 5.7 percent to US$11.17 billion. It reported core net profit of US$183.5 million, down 37.4 percent on-year.
That’s a sharp miss from UOB KayHian’s forecast for core net profit of US$320 million to US$360 million for the quarter.
“The lower profit reflected the difficult operating environment for tropical oils and seasonal sugar losses during the quarter,” Wilmar said in an SGX filing after the market close on Thursday. “Nonetheless, the Group continued to achieve strong sales growth in oilseeds & grains, arising from higher crushed volume and the later Chinese Spring Festival in 2018.”
In the outlook, Chairman and CEO Kuok Khoon Hong said the company was “cautiously optimistic that performance for the rest of the year will be satisfactory.”
But he also noted that China’s proposed tariffs on imports of U.S. soybeans would likely result in volatile soybean prices in coming quarters; “Even though performance of our Oilseed Crushing business will not be affected in the short term, a prolonged standoff between China and the U.S. would affect the utilization of our crushing plants.”
Singapore Post reported its fiscal fourth quarter net profit was S$23.95 million, swinging from a year-earlier loss of S$65.25 million, while revenue was up 13.5 percent at S$367.54 million.
For the full fiscal year, net profit surged 278.4 percent to S$104.95 million. That compared with a consensus expectation of S$105 million to S$123 million, according to UOB KayHian.
The rise in net profit was largely due to the absence of one-off impairment charges, the company said, noting that excluding exceptionals underlying net profit fell 9.2 percent for the year to S$115.61 million. For the fourth quarter, underlying net profit was S$15.27 million, down 28.6 percent. UOB KayHian had forecast underlying net profit of S$27.3 million for the fourth quarter and S$117.0 million for the full year.
SingPost proposed a final dividend of 2.0 Singapore cents per share, bringing the total dividend for the year to 3.5 Singapore cents, with a payout ratio of 76 percent of underlying profit. The year-earlier final dividend was 0.5 Singapore cent.
“We continue to execute on our transformation and build on our partnership with Alibaba in eCommerce. We are integrating and scaling our eCommerce businesses in the U.S. and Southeast Asia, as well as the rest of our overseas operations, and optimising the cost structure,” Paul Coutts, group CEO, said in the statement.
ST Engineering reported net profit for the first quarter of S$117.7 million, up 18 percent on-year, while revenue rose 9 percent on-year to S$1.65 billion. Revenue in the electronics, aerospace, land systems and marine sectors all rose, the company said in a filing to SGX before the market open on Friday.
The company said its order book was at S$13.4 billion at the end of the quarter, with around S$3.2 billion expected to be delivered this year.
“We started the year with healthy revenue growth and net profit. We also secured numerous contracts including Smart City projects in the past quarter,” Vincent Chong, president and CEO, said in the statement. “With a strong order book, the Group remains on track for steady growth.”
Creative Technology reported a fiscal third quarter net loss of US$3.76 million, widening from a loss of US$4.59 million in the year-earlier quarter. Sales fell 6 percent on-year to US$15.02 million in the quarter, Creative said in a filing to SGX after the market close on Thursday. It said revenue fell due to “uncertain and difficult market conditions which continued to affect the sales of the group’s products.”
For the nine months ended March 31, Creative reported a net profit of US$14.84 million, swinging from a year-earlier loss of US$17.31 million.
Noble said in an SGX filing after the market close on Thursday that it was appointing Provenance Capital Pte. as an independent financial adviser (IFA) to provide an opinion on whether its restructuring plan was “fair and reasonable and not prejudicial to the interests of shareholders.”
“The IFA Opinion will be included in the shareholders circular in relation to the proposed restructuring,” Noble said.
SGX reportedly had issued a March 8 notice requiring the troubled commodity trader to appoint an IFA to review the proposal.
Activist shareholder, Abu Dhabi-based fund Goldilocks Investment said in a statement on Thursday that the appointment came two months after SGX requested it.
“It is important that the terms of this engagement and the estimated timelines of completion be made available to SGX and all shareholders,” it said. “Goldilocks wants the IFA scope to be substantive as opposed to predecessors’ exercise or a rubber stamping of findings made by others.”
Goldilocks, which owns around 8 percent of Noble’s shares, has sought legal action against the company.
SBS Transit reported profit attributable to shareholders of S$16.76 million for the first quarter, up 63.7 percent on-year, while revenue wa up 15.8 percent on-year at S$328.18 million.
In a filing to SGX after the market close on Thursday, SBS Transit said its revenue from public transport services was up 16.3 percent on-year in the first quarter at S$313.3 million, mainly on higher fees earned under the bus contracting model with higher operated mileage, higher rail-services ridership with the commencement of the Downtown Line and higher other operating income. That was offset by lower average rail fare, it said.
“Revenue from public transport services is expected to be higher,” the bus operator said in its outlook statement, pointing to the commencement of the Seletar Bus Package in March and the full-year revenue contribution from the Downtown Line.
ComfortDelGro, which reports earnings after the market close on Friday, held 74.59 percent of SBS Transit as of March 5, according to SBS Transit’s annual report.