Singapore Pre-Market Tuesday: Trade tensions, Golden Agri, gaming stocks, Yanlord

Dhoby Ghaut MRT stop in SingaporeDhoby Ghaut MRT stop in Singapore

Singapore’s shares will start trade with a middling lead on Tuesday, amid continued jitters over U.S.-China trade tensions, while earnings from Golden Agri-Resources may disappoint.

Traders may also still be watching Malaysia warily. Despite the KLCI defying broad predictions of a crash on Monday after the shock election outcome to end up 0.2 percent, some shares may still face pressure amid continued uncertainty after the shock election outcome, with policy changes and key appointments still being announced.

The Dow Jones Industrial Average ended up 0.27 percent on Monday, while the S&P 500 edged up 0.09 percent and the Nasdaq rose 0.11 percent. Futures for the three indexes had turned nose down early Tuesday.

Japan’s Nikkei 225 opened a tad higher, rising 0.09 percent by 8:04 A.M. SGT.

Trade tensions

Some trade tensions have eased somewhat after U.S. President Trump took to Twitter over the weekend to offer what appears to be a major concession to China ahead of talks between the two countries. On Monday, he took to Twitter again to defend himself amid bipartisan criticism, while the Wall Street Journal reported the unprecedented move by a president to interfere in a regulatory matter may have been part of a larger deal.

On Sunday U.S. time, Trump said on Twitter he would help Chinese telecom giant ZTE “get back into business, fast,” by instructing the Commerce Department to “get it done.” Last month, the U.S. had banned ZTE from doing business with U.S. companies for seven years as a penalty for illegal shipments to Iran and North Korea.

“The impulsive knee-jerk response seems to have rung the all-clear bell in much of the coverage with a bias toward viewing Trump’s bellicose rhetoric as ultimately caving time and again,” Scotiabank said in a note on Monday.

To be sure, trade tensions continued to dampen market sentiment.

“Investor sentiment was checked by hawkish policy comments by U.S. Secretary Wilbur Ross – he said that China had not been playing fair
on trade and warned that the U.S. would impose EU steel tariffs if a deal was not reached by 1 June,” Patersons said in a note on Tuesday morning.

The dollar index, which measures the greenback against a basket of currencies, was at 92.66 at 7:50 A.M. SGT, up from as low as 92.25 overnight. The 10-year U.S. Treasury yield rose overnight, and was at 3.00 percent at 4:59 A.M. SGT.

Patersons said that the U.S. dollar was bolstered overnight by some investors lightening holdings in emerging market currencies and by higher Treasury yields.

Nymex WTI crude oil futures were up 0.17 percent at US$71.08 a barrel at 7:35 A.M. SGT, while ICE Brent crude futures were up 1.44  percent at US$78.23 at 5:59 A.M. SGT, according to Bloomberg data.

Gaming stocks

Gaming plays around the region, such as Genting, may be in focus after the U.S. Supreme court ruled on Monday that states could legalize sports betting. Genting has long angled to expand into the U.S. market.

Netlink NBN

Netlink NBN reported fiscal fourth quarter profit after tax of S$15.3 million, 6.4 percent below the forecast from its IPO prospectus, while revenue was S$80.4 million, 4.4 percent below the forecast.

The trust pointed to its “financial period” of 19 June 2017 to 31 March 2018 and noted that profit after tax was S$50.0 million, 10.8 percent above the forecast, while revenue was S$228.6 million, 1.8 percent below the forecast.

The distribution per unit (DPU) was 3.24 Singapore cents for the financial period about 5 percent higher than the IPO forecast, for an annualized yield of around 5.7 percent, the trust said.

“Our better-than-forecast earnings reflects the resilience of our business model. The growth in the number of connections for residential, non-residential and segment fibre for the relevant financial period was higher than the forecast,” trustee-manager CEO Tong Yew Heng said in a statement after the market close on Monday.

Yanlord Land

Yanlord Land reported its first quarter profit after tax rose 22 percent on-year to 1.797 billion yuan, while revenue was up 14 percent on-year at 7.188 billion yuan on higher average selling prices.

“Demand for prime residential developments in the PRC continues to be healthy driven by continued upgrader demand and population inflow into first and core second tier cities,” Zhong Sheng Jian, Yanlord’s chairman and CEO, said in a statement to SGX after the market close. “While near term volatilities may arise due to the introduction of austerity measures, our quality developments continue to attract the attention of home buyers.”

He also noted that the acquisition of the Tulip Garden project in Singapore was the company’s first entry into the city-state’s residential market.

Golden Agri-Resources

Golden Agri-Resources reported its first-quarter net profit fell 68 percent on-year to US$12 million, while revenue fell 11 percent on-year to US$1.82 billion.

Revenue fell on a combination of lower palm oil production and lower CPO prices, the company said in a filing to SGX before the market open on Tuesday.

“First quarter 2018 was a challenging period for the palm oil industry. Industry experts are also concerned about a production surplus in the second half of the year, due to seasonality and low production in the first quarter,” Chairman and CEO Franky Widjaja said in the statement. “However, we believe CPO prices will be supported by growing food demand as well as from increasing biodiesel usage.”

Banyan Tree Holdings

Banyan Tree Holdings reported first-quarter profit after tax and minority interests (PATMI) was S$20.2 million, up from S$1.2 million in the year-earlier quarter, while revenue rose 9 percent on-year to S$98.2 million.

Revenue was up on strong performance from the Thailand and Seychelles resorts and higher revenue recognition from the Cassia Bintan and Cassia Phuket condominium projects, it said in a filing to SGX after the market close on Monday.

Wheelock Properties

Wheelock Properties reported its first-quarter profit after tax rose 235.5 percent on-year to S$30.82 million, while revenue fell 40.3 percent on-year to S$55.97 million.

Revenue fell as two projects, the Panorama and Ardmore Three, were completely sold last year and as interest income from quoted securities was lower, the company said in a filing to SGX after the market close on Monday.

Roxy-Pacific

Roxy-Pacific reported that profit after tax for the first quarter rose 11 percent on-year to S$7.0 million, even as revenue fell 29 percent on-year to S$46.45 million.

In a filing to SGX after the market close on Monday, the company said that revenue fell due to a lower contribution from property development and property investment, partially offset by higher revenue from the hotel ownership segment.

Revenue from the property development segment, which contributed 68 percent of the group’s turnover, fell 39 percent on-year to S$31.8 million in the quarter, mainly on lower revenue recognition form Trilive, as the project is at its final stage of completion, as well as the absence of revenue recognition from three other projects completed in 2017.

“Ahead of the property market’s gradual recovery, the group has prudently replenished its land bank with predominantly freehold sites in Singapore at attractive prices to maximise the yield potential of these projects,” Roxy-Pacific said in its outlook. “The group looks forward to the launch of another six development land sites in 2018 as it continues to prudently seek attractive sites for development.”

Tiong Seng

Tiong Seng reported first quarter net profit attributable to shareholders jumped 385.8 percent on-year to S$4.94 million on improved profitability of the construction segment, while revenue fell 15.3 percent on-year to S$140.75 million.

Construction contract revenue fell 12.3 percent on-year in the quarter to S$131.83 million, while the segment’s operating profit rose 93.7 percent to S$6.96 million, amid improved profit margins, the company said in a filing to SGX after the market close on Monday.

Property development revenue fell 45.2 percent on-year to S$8.43 million, mainly on the timing of revenue recognition, while the segment posted an operating loss of S$281,000, swinging from a year-earlier operating profit of S$1.49 million, the company said.

“In contrast to sluggish market conditions for the construction sector in 2017, proposed inflows of government infrastructure projects and private sector construction demand promises greener pastures as the year progresses,” the company said in its outlook statement. ” Industry observers indicated that construction companies are generally positive on taking on more construction projects in 2018 in view of the slew of en-bloc projects that could be relaunched as well as upcoming mega infrastructure projects.”

Silverlake Axis

Silverlake Axis reported profit after tax for the fiscal third quarter fell 93 percent on-year to 28.96 million ringgit, while revenue for the quarter rose 2 percent on-year to 126.70 million ringgit.

The financial-services technology company said in a filing to SGX after the market close on Monday that operating profitability in the quarter was hurt by lower enhancement services revenue and a net foreign exchange loss, swinging from a net foreign exchange gain in the year-earlier period.

“With the exception of maintenance and enhancement services, which delivered fewer large projects, all business activities contributed higher revenue during the quarter,” it said.

Jumbo Group

Jumbo Group reported fiscal second quarter profit after tax fell 29.7 percent to S$4.25 million, while revenue rose 6.0 percent to S$41.75 million.

Revenue from Singapore operations rose by S$800,000 in the quarter, while revenue from the Jumbo Seafood outlets in China rose by S$1.5 million as the restaurant operator added its first Jumbo Seafood outlet in Beijing in July 2017 and a fourth one in Shanghai in November 2017.

“As the group continues to grow its core operations and strengthen its organization structure and depth for its planned expansion in Asia, performance may be varied as human capital, gestation period for new outlets and operational costs will be some of the key challenges,” the company said in a filing to SGX after the market close on Monday. It said it expected to expand the Jumbo Seafood brand to other Chinese cities, with the sixth mainland outlet to start operations in Xi’an by June. It also entered a joint venture to operate “Tsui Wah” brand outlets in Singapore.

CNMC Goldmine

CNMC Goldmine reported its net profit for the first quarter surged 791.8 percent on-year to US$613,331, while revenue rose 29 percent on-year to US$6.1 million. A stronger Malaysian ringgit against the U.S. dollar yielded a foreign exchange gain, the company said in a filing to SGX after the market close.

CNMC produced and sold 4,518.50 ounces of fine gold in the first quarter, its highest since the third quarter of 2016 and up 23.1 percent on-year, it said.