Commodities pullback is meant for good, or just temporary...
Singapore CPI in May hit 5.6 %, up again from 5.4 % in April according to the latest data released last Thursday (Jun 23). This reading is the highest rate since late 2011, making inflation the headline last week.
💡Dear investors, the impact of inflation to stock market should be seem from the fundamental standpoint of view. Gauging from the cost of materials used, labor, inventories... to the cost of borrowing will directly affect the profit margin of the company. Therefore, if high inflation environment is on-going for the next few quarters, investors better re-valuate the NAV, earning ratios and other intrinsic values of the companies before entering the market
SINGAPORE consumer prices continued to climb in May, with headline inflation hitting 5.6 per cent, up from 5.4 per cent in April, according to the latest data on Thursday (Jun 23). Read more at The Business Times. (Source: www.businesstimes.com.sg)
Last week, the stock markets were holding well above few of the critical supports, showing the determination of governments to keep the capital markets vibrant as well as, to fight off the high inflations. In fact, there was a dip in energy prices last week... but the question is whether the commodities pullback is really able to keep the rising living cost in control or just a temporary pullback, we need to check on the coming CPI, PPI and GDP. 💡 Investors should watch out for the market estimate as well as the actual figures of these data. Especially if your investment portfolio is taken up by companies that come from the downstream industries or companies that made up parts of the supply chain...e.g. manufacturing, constructions and transportation. Inflation will eat into the underlying profit of this companies
Hong Kong market:
Bluntly put it, Hong Kong will continue to be "blessed" by the Beijing government, and many funds are anticipating to announcement of the "present surprises" from President Xi with the coming of the 1st July Holiday. Therefore, investors should be aware of the remarks made by the leaders during the celebration of anniversary for the return of Hong Kong . As the matter of fact, Hong Kong market did not soar with strong rebound, but recently HSI was showing sign of moving in steady pace of forming a gradual uptrend. And slowly steering the index back on track, may in fact a wiser move to defend its own index from the brutal hedge funds. But to remind investors again, the exchange rate is something that need to be take note of from now on if you want to participate in the foreign market.
Focus Point : Blockchain, NFTs and the Metaverse
Tencent, the Chinese technology and entertainment giant, recently announced the creation of its own metaverse-driven division. With the increasing adoption of metaverse, not only accelerate the boom of the NFT, other future forms of digitalization like virtual universe, AR and VR... will also encourage more different kind of industrial applications to be developed regardless of the values of bitcoin. But there was a recent report on doubting the worthlessness of bitcoins circulated in the market. Well, the truth is having more and more innovative and practical inventions that adopted this technologies to build on, will in fact make its existence more significance than ever.
A Chinese Communist Party newspaper has warned investors should be prepared for the bitcoin price to hit zero...
Other links:
Other Focus (Results and Highlights of Corporate Actions):
UOB to issue $400 mil perpetual capital securities with 4.25% fixed distribution rate
Biotech startup Mirxes weighs US$300 mil Singapore IPO
Reject TTJ’s privatisation offer, says IFA as offer price below valuation
Lion-OCBC China Leaders ETF declares first dividend of 3.3 cents per share
CICT enters into 3 IPTs worth $8.5m with Temasek subsidiaries
Maxi-Cash proposes to adopt shareholders' mandate to enter into IPTs with Aspial Group
JB Foods to build new cocoa processing facility in Ivory Coast
Coming Market Focus (Extract):
Sunday, June 26, 2022 | |
CNY | Chinese Industrial Profit yoy ytd May |
Monday, June 27, 2022 | |
USD | Core Durable Goods Orders mom |
USD | Pending Home Sales mom May |
USD | FOMC Member Williams Speaks |
Tuesday, June 28, 2022 | |
USD | Goods Trade Balance |
USD | CB Consumer Confidence |
USD | API Weekly Crude Oil Stock |
Wednesday, June 29, 2022 | |
USD | FOMC Member Mester Speaks FOMC Member Bullard Speaks |
USD | GDP qoq Q1 |
USD | GDP Price Index qoq |
USD | FOMC Chair Powell Speaks |
USD | Crude Oil Inventories |
EUR | ECB President Lagarde Speaks |
CNY | Chinese Composite PMI June |
CNY | Manufacturing PMI June |
CNY | Non-Manufacturing PMI June |
Thursday, June 30, 2022 | |
GBP | GDP yoy qoq Q1 |
USD | OPEC Meeting (Tentative) |
USD | Initial Jobless Claims |
USD | PCE Price Index yoy mon May |
CNY | Caixin Manufacturing PMI Jun |
Friday, July 1, 2022 | |
HKD | Hong Kong - Public Holiday |
GBP | Manufacturing PMI Jun |
USD | ISM Manufacturing PMI Jun ISM Manufacturing Employment Jun |
USD | U.S. Baker Hughes Total Rig Count |
p.s:
Next FOMC Meetings 2022; July. 26-27
Investment Tips 💡 this month (June 2022🦉:)
STI closed at 3,111.65 point last Friday and holding well above 3,100 level. Just be careful the later part of this week as the FOMC Chair Powell will be speaking on Wednesday, and market may want to exit before his remarks.
Moreover, I also expect the later part of the week will turn quieter as HK will close for public holiday on Friday, as well as the ending of June Future contracts is also happening in the same week. Another point to note is the commodities related counters are seem rebounding after the selloff last week.
Next, the interest rate is rising now. The bank will raise the rates on housing loans, as well as the rates of their new issued bonds at the same time. Investors who want a safer instrument to grow the money, you can consider to find out the latest offer with our bond desk.
I had tabulated the recent bond issued before and after the FOMC meeting, showing the rising trend of coupon rates as followed:
Date: 28 Jun | **ABN AMRO BANK-SGD 10.25NC5.25 SGD BENCHMARK TIER 2–INITIAL GUIDANCE 5.75% AREA |
Date: 27 Jun | *** NEW ISSUE: UOB SGD PERP-NC-5.25 YEAR AT1 @ 4.25% - OPEN FOR UPSIZE *** |
Date: 20 Jun | ** HSBC Holdings plc SGD 10NC5 Tier 2 – IPG 5.50% area ** |
June 14-15, 2022 | FOMC Meeting |
Date : 9 Jun | *** Standard Chartered PLC SGD RegS 11NC10 FXD Senior HoldCo – Priced @ 4.50%** OPEN FOR UPSIZE |
Date : 8 Jun | ** OVERSEA-CHINESE BANKING CORPORATION LIMITED – US$ TIER 2 10NC5 REG S FIXED RATE SUBORDINATED NOTES – IPG ** |
Investors can consider to take up the Margin Facilities by paying only 30% - 50% of downpayment for bond subscriptions. In addition, you can also drop me an email at adatamyy@phillip.com.sg if you want me to assist you to be part of the bond email distribution list.
The Future
The two-day G7 summit that kicked off in Germany on 27 June, had brought the focal points right on the table for discussion. One of the key discussion is raising $600 billion by 2027 for global infrastructure investments which meant to be in rivalry with China's one Belt one Road initiative.
Other discussions include capping on the energy prices, and carrying on to exercise further sanctions on Russia. In short, from the investor point of view, is the commodity prices will likely to continue be very volatile in the future. And I expected by 2024, countries could be divided into three main alliances... as of now, there are few organisations already formed: QUAD, SAARC, SCO, BRICS & G7... I will discuss more on this in near future.
CASH PLUS Promotion:
Low-commission trading account is available... and check out for Promotion Details
(Waived for US and HK Foreign Custody fee until 31 December 2022.)
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