Related insights
- Singapore Equity Picks17 May 2024
- China: Mixed data underscore need for more easing17 May 2024
- USD-JPY Still Biased Higher; Buy On Dips 17 May 2024
Trending Sector
Global Stocks
3 trends to watch beyond the results season
- #1 Persistent USD strength can pose as a headwind to retailers with huge international exposure
- Strong USD implies lower earnings post translation, with a more pronounced impact for companies facing waning demand and/or low-margin products/strategies
- FMCG companies that derive high revenues outside of the US such as Kimberly Clark (47% of FY23 revenues), Coca-Cola (64%), Colgate-Palmolive (74%), had noted currency headwinds in their latest 1Q24 results
- #2 All eyes will be on the durability of the ongoing AI momentum as NVIDIA reports on 23-May
- NVIDIA has guided for revenue to increase by >US$4bn q/q for the fourth straight quarter
- Strong cloud performance as well as AI-monetisation efforts by Amazon’s AWS, Microsoft’s Azure, Google’s Cloud could spur further data center spending
- AI appears to be the next “go-to strategy” amongst the “Magnificent Seven”, as seen from the higher AI-related investment amongst less notable AI players like Meta and Tesla
- #3 Recovery in the smartphone industry with potential tailwinds from AI-smartphones
- Latest Qualcomm and Apple results show smartphone demand, especially in China, held up better than initially feared
- Qualcomm and Apple to benefit when AI capabilities move downstream to smartphones and PCs, which are expected to gain traction in the coming year(s) per our earlier analysis (page 3)
- Venture Corp as the SG stock to watch – 1) stronger USD tends to be a tailwind for VMS, 2) uplift from its recent foray into AI data centre ecosystem, 3) watching for stronger downstream recovery in 2H24
Global F&B
Feeling the pinch as consumers scale back
- Quarterly earnings reports of global F&B companies show that inflation is taking a bite out of food spending
- Sales of Yum! Brands and Starbucks declined for the first time since 2020
- Mcdonald's reported revenue growth of 4.6% but earnings was a miss on a slowdown in core markets and negative impact from the Middle East tensions
- The quick service restaurant industry continues to face broad based pressures as consumers face elevated prices in their daily spending
- F&B chains could continue to experience softness as dining out moderates in the US
- US Confidence Index declines for the third consecutive month in April
- Food away from home is listed as the top category that consumers will reduce spending on in the next six months
- US exposure of Mcdonald's, Yum! Brands, and Starbucks stood at 41%, 58% and 73% respectively
Regional REITs
Unwarranted price dips with FOMC narrative unchanged
- ‘High for longer’ thematic an overhang but markets having priced in almost nil cuts in 2024 may mean a bottom could be near
- SG-REITs most resilient index in Asia ex-Japan, C-REITs rebound as China benchmark heads lower, HK-REITs recovered in 2nd half of April on Stock Connect news by CSRC
- Positive read across most results in 1Q24, while managements’ guidance has turned more modest as consumer and business sentiment turn more cautious
- Sector preference: SG – retail & industrial; HK – retail; CN – warehouse
Stocks to Watch
CapitaLand India Trust (CLINT)
Proposed forward purchase of IT buildings at HITEC City
- Entered a forward purchase agreement with Phoenix Group to acquire IT buildings with a total leasable area of 2.5m sq ft in HITEC City, Hyderabad
- Pro forma net profit from buildings expected to be approx. S$4.5m on a stabilised basis; pro forma distribution per unit to increase from 6.45 Scts to 6.47 Scts
- CLINT will provide funding of INR2.15bn (c. S$34.7m) to refinance existing loan and receive interest higher than its borrowing cost; CLINT will also provide funding towards future development
- We currently have a BUY recommendation with TP S$1.30
Legend
| (+) | (-) |
Earnings | Positive earnings revision | Negative earnings revision |
Recommendation | Upgrade | Downgrade |
TP | Increase | Decrease |
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Related insights
- Singapore Equity Picks17 May 2024
- China: Mixed data underscore need for more easing17 May 2024
- USD-JPY Still Biased Higher; Buy On Dips 17 May 2024
Related insights
- Singapore Equity Picks17 May 2024
- China: Mixed data underscore need for more easing17 May 2024
- USD-JPY Still Biased Higher; Buy On Dips 17 May 2024
- Member of Central Deposit Insurance Corporation (CDIC)