Comprehensive Analysis of Listed Companies by Lim & Tan Securities
Date: November 18, 2024
FSSTI Index and Market Overview
The FSSTI Index closed at 3,744.7, marking a slight increase of 0.2% for the day. Month-to-date, the index has risen by 5.2% and year-to-date by 15.6%. In contrast, major US indices experienced declines, with the INDU Index falling by 0.7%, the SPX Index by 1.3%, and the CCMP Index by 2.2%. The recent market activity was influenced by stronger-than-expected US economic data and comments from the Federal Reserve suggesting no immediate need for rate cuts. This news shifted investor expectations, leading to a sell-off on Friday.
Seatrium: Delivering Ahead of Schedule
Seatrium, with a stock price of \$1.86, recently delivered its fifth newbuild jackup rig, “Var,” to Borr Drilling nearly a year ahead of schedule. This early delivery underscores the company’s consistent ability to execute major projects safely, on time, and within budget. The success of Var highlights the completion of five B Class jackup rigs for Borr Drilling. Designed to operate in water depths of up to 400 feet, Var can drill down to depths of 35,000 feet. Equipped with advanced systems, it accommodates up to 150 people. Despite the ongoing investigations related to Brazil scandals, the company maintains a robust balance sheet, and its stock is recommended as a HOLD due to fair valuations.
CSE Global: Securing Major Contracts
CSE Global, trading at \$0.435, reported a 15.4% year-on-year revenue increase to S\$213.9 million for the third quarter of 2024. It secured major contracts in the USA, including a US\$68.5 million contract for electrical houses and integration systems, and two contracts totaling US\$28.8 million for power distribution centers. The company is poised to benefit from the US government’s policies to boost oil and gas production and the electrification trend driven by clients like Tesla and Amazon. With an attractive dividend yield of 6.3% and a potential 38% return based on consensus target prices, CSE Global is recommended as a BUY.
Chinese Banks and Economic Measures
Chinese regulators have instructed banks to lower interbank deposit rates to free up funds and support the economy. This comes as banks face liquidity strains due to increased policy loosening and a rally in Chinese stocks diverting funds from debt instruments. The directive, effective December 1, aims to alleviate pressure on banks to support economic growth amid sliding margins.
Hopson Development: Negotiating New Loans
Hopson Development Holdings is negotiating a new private loan with Seatown Holdings to refinance an expired bridge facility. The company, engaged in high-end property development, is working on securing a new loan amid ongoing property market challenges in China.
Macro Market News Affecting US, Hong Kong, and China
BCA Research notes that post-COVID inflation has affected bond yields, impacting their hedging properties. The prospect of expanding US-China trade tensions may not lead to immediate recovery in Chinese equities. However, a stimulus plan designed for this scenario is anticipated, albeit with expected volatility in the markets.
Xi Jinping on Strengthening Strategic Ties
Chinese President Xi Jinping emphasized strengthening strategic ties with Malaysia, focusing on mutual cooperation in digital economy, AI, and new energy. Both nations aim to oppose protectionism and promote trade liberalization, enhancing regional and international collaboration.
Institutional and Retail Fund Flow Analysis
Institutional investors showed a net buying trend, with significant interests in stocks like DBS and UOB. Conversely, retail investors demonstrated net selling, with notable sell-offs in DBS and UOB as well. These movements reflect the shifting sentiments in the market amid economic adjustments and strategic investments.
Upcoming Dividends and Special Distributions
Several companies are set to distribute dividends in the coming months, including AIMS APAC REIT, DBS, and Netlink NBN Trust. Investors should note these dates for potential returns on investments.
SGX Watch-List Updates
The SGX Watch-List includes companies like Amos Group, ASL Marine, and Addvalue Technologies, among others. These companies are under scrutiny due to various performance and compliance factors.
For more detailed financial insights and market analysis, Lim & Tan Securities continues to provide comprehensive research and recommendations to guide investors in their decision-making processes.
