Comprehensive Financial Market Insights: In-Depth Analysis of Key Companies

Date of Report: December 9, 2024

Broker: Lim & Tan Securities

Market Overview

On December 9, 2024, Lim & Tan Securities provided an insightful analysis of the financial markets, highlighting the performance of various indices and commodities. The report noted the upward trends in U.S. stocks, driven by a solid job market that fuels economic growth without triggering inflation concerns. The S&P 500 reached record highs, and the Nasdaq rose sharply, while the Dow Jones dipped slightly.

Company Analysis: CNMC Goldmine

CNMC Goldmine, with operations in Kelantan, Malaysia, is poised for significant growth, according to Lim & Tan Securities. The company benefits from the rising strength in gold prices, which have surged by nearly 30% this year. CNMC is projected to report its best performance since 2016, with a net profit of US\$4.4 million in the first half of 2024, against US\$9.1 million in 2016. The average realized gold price has increased significantly to over US\$2,600/oz, enhancing CNMC’s profitability since the company sells gold at spot rates.

With plans to expand production capacity by 1H25, funded internally, CNMC is expected to maintain its earnings growth momentum, provided gold prices remain stable. Lim & Tan Securities maintains a “BUY” recommendation for CNMC Goldmine, given its promising prospects and strong market position.

Company Analysis: Singapore Post (SingPost)

Singapore Post (SingPost) faces a transformative phase after deciding to divest its Australian business for A\$1 billion, as part of a strategic review aimed at maximizing shareholder value. S&P has placed SingPost on CreditWatch negative due to uncertainties surrounding its future strategy and the potential impact on earnings. The Australian business accounted for 58% of SingPost’s total revenue in the first half of FY2025, making its sale a pivotal change.

Despite these challenges, the transaction is expected to yield a net gain of \$312.1 million, which SingPost plans to use to reduce its Australian dollar-denominated debt and potentially issue a special dividend. Lim & Tan Securities projects a target price of S\$0.64 for SingPost, representing an 11.3% upside from the current share price, and maintains an “Accumulate on Weakness” stance, awaiting the company’s strategy review post-sale.

Other Market Highlights

Lim & Tan Securities also highlighted key dividend announcements and strategic moves in the market. Companies like Frasers Logistics Trust, Mapletree Pan Asia Comm Trust, and CapitaLand Ascendas REIT were noted for their high consensus forward dividend yields, while Jardine Cycle & Carriage and OCBC Bank were among those with lowest consensus forward P/E ratios.

In terms of share transactions, notable acquisitions and disposals were recorded, including significant institutional net buys and sells in companies like Yangzijiang Shipbuilding, OCBC, Keppel, and DBS. Meanwhile, fund flow data from the Singapore Exchange indicated varied investor sentiment across sectors such as consumer cyclicals, REITs, technology, and utilities.

Macro Market News

The report provided macroeconomic insights affecting the US, Hong Kong, and China markets. It noted the resilience of US growth despite challenges in the manufacturing sector and highlighted global trends in purchasing managers’ indices (PMIs). The analysis pointed to a cautious consumer spending environment in the US as pandemic-era savings dwindle, and labor market softening impacts return-to-office policies.

Lim & Tan Securities expects the US to outperform the weak global economy in the short term, with a tactical tilt towards US assets and the dollar, despite the potential for market volatility during the presidential transition period.

Conclusion

Lim & Tan Securities delivers a comprehensive overview of the financial markets, offering valuable insights into the performance and strategic directions of key companies like CNMC Goldmine and Singapore Post. With expert recommendations and macroeconomic analysis, the report serves as a crucial resource for investors navigating the complex landscape of the global financial markets.