Market Overview

Singapore

Straits Times Index (STI) is a market capitalisation weighted index that tracks the performance of the top 30 companies listed on SGX.

The Monetary Authority of Singapore has opted to maintain its current monetary policy stance for the third consecutive time. This decision comes amidst anticipations of inflation easing later in the year, indicating that any potential adjustments to policy might be postponed further into the future.

According to Bloomberg Economics, the indications imply that the Monetary Authority of Singapore is likely to lean towards maintaining its current tight policy settings at the upcoming meeting in April too.

The above news could translates to a slightly weaker performance in the stock market as seen in January, whereby STI was hovering near 3130 - 3140.

STI started forming lower high since the start of the year, with all 3 MAs starting to slope down gently

Immediate support for STI could be around psychological level of 3100 where buying pressure could return. Otherwise, we may continue observing lackluster performance, comparing to the US market.

Hot News (Click to read):

• Singapore’s PMI rises further in January, echoing region’s improved factory activity (The Business Times)

• China’s Jan services activity expands at slower pace: Caixin PMI (The Business Times)

United States

Dow Jones Industrial Average (DJIA) tracks the daily price movements of 30 large, public-owned blue-chip American companies.

Prices remain above the key 37,000 support level, with attempts to breach the 39,000 psychological mark, marking new highs in January 2024. The 20d MA trails below the index, signaling ongoing near-term market strength.

S&P 500 Index is a market-capitalization weighted index of the 500 leading companies in the US which is widely considered as one of the best gauge of the US economy.

With close to half of the S&P 500 companies completing their earnings announcement, majority have beat the estimates. Both indexes continued to push new highs even as the FED mentioned that it’s unlikely that it will begin rate cuts in March 2024.

Market pricing currently suggests the potential for five 0.25% rate cuts. However, a delay in initiating these cuts compared to market expectations could signal caution.

Price is currently testing the 5000 level where some profit-taking can return first. If S&P 500 can break and hold above, likely to see more strength & upside once rate cuts are implemented.

Hot News (Click to read):

• Powell insists the Fed will move carefully on rate cuts, with

  probably fewer than the market expects (CNBC)

• Gold prices to hit $2,200 and a ‘dramatic’ outperformance

  awaits silver in 2024, says UBS (CNBC)

Singapore Earnings Calendar

Note that the below information is taken from the dates displayed on Yahoo! Finance. The below calendar is not exhaustive. Please refer to Yahoo! Finance and SGX Announcement for exact dates & timings.

United States Earnings Calendar

Note that the below information is taken from the dates found on Earnings Whispers and Nasdaq. We've exclusively chosen stocks favored by investors with widely recognized names. The below calendar is not exhaustive. Please refer to Earnings Whispers & Nasdaq for the full list.

Singapore Stocks Spotlight

KEPPEL CORP (BN4.SI)
Target Price: S$7.60

About Keppel Corp

• Keppel Corp. Ltd engages in the provision of offshore and

  marine engineering and construction services

• It operates through the following segments: Energy and

  Environment, Urban Development, Connectivity, Asset

  Management, and Corporate and Others

Fundamental

• FY23 core net profit grew 5.6% YoY, recurring income grew 54% to S$773m, or 88% of net profit. Infrastructure made up 90% of this

• Energy earnings looks to be sustainable, with 60% of capacity locked in on long-term contracts for more than 3 years

• Potential sales of rigs could return over S$3b to the group

Technical

• Key resistance remain near 7.20 where selling pressure returned

• Long term uptrend remains intact but we may see some sideway consolidation as 100d and 200d MA starts to flatten out

• Immediate support is around 6.80 where a base has been found over 2 weeks in Jan 24

• If price is unable to break and hold above 7.20, may see some pullback towards support to accumulate on dips

• Target revised to $7.60

SATS (S58.SI)
Target Price: S$3.20

About SATS

• SATS Ltd. engages in the provision of food solutions and gateway services

• Operating through the following segments: Food Solutions, Gateway Services, and Others. The Food Solutions segment provides in-flight and institutional catering, food processing, distribution services, and airline laundry services

Fundamental

• The company reported a reduced net loss of S$7.8m in the first half of the fiscal year, with a net profit of S$22.2m in Q2

• Following the acquisition of Worldwide Flight Services (WFS), it is poised for increased profitability

• There is potential for improved operating leverage from higher cargo volumes, which could elevate SATS' overall operating margin from its current 3.1%

Technical

• Prices have rebounded from the 2.40 support multiple times since 2022

• 20d MA had crossed above both longer term MAs late Nov 23 and recently, 100d MA crossed above the 200d MA, indicating a potential uptrend reversal

• If price is able to break and hold above the 2.90 immediate resistance level, may see more strength towards 3.00, where some profit-taking can return first

SEATRIUM (S51.SI)
Target Price: S$0.080

About Seatrium Ltd

• Seatrium Ltd operates in several segments: Rigs and Floaters, Repairs and Upgrades, Offshore Platforms, Specialized Shipbuilding, Ship Chartering, and Others

• This includes bulk trading in marine engineering products, harbor tug services, collection and treatment of used copper slag, and processing and distributing copper slag for blast cleaning

Fundamental

• Anticipating a notable increase in net loss for FY23 compared to the previous year due to significant non-cash write-downs associated with surplus non-core assets and obsolete inventories

• Recent cancellation of offshore wind farm that was awarded in 2023

Technical

• Longer term downtrend intact after selling pressure returned near the key 0.150 resistance level

• 0.100 key psychological level gave way recently where further confirms that selling pressure still present.

• Potential downside toward 0.080 if weakness continues

• All 3 MAs are still heading down with no signs of reversal yet, to be cautious for any long position for now

SIA (C6L.SI)
Target Price: S$7.60

About SIA

• Singapore Airlines Ltd. engages in the provision of passenger and cargo air transportation services

• Operating through the following segments: Full-Service Carrier (FSC), Low-Cost Carrier (LCC), Engineering Services

Fundamental

• Passenger traffic rose 15.8% year on year in December 2023, while the group's passenger capacity jumped 16.1% during the month

• 24.4% increase in passenger carried in December compared to a year ago

Technical

• Buying pressure returned near 5.90 - 6.00 support level where price rebounded and eventually broke the resistance turned support of 6.50

• 20d MA has recently crossed above 100d MA, still pointing up sharply, indicating short-term strength

• Immediate key psychological resistance is around 7.00 where we may see some profit-taking

• If price is able to break and hold above 7.00 and 20d MA crossed above 200d MA, potential upside target towards 7.40 - 7.60

United States Stocks Spotlight

COSTCO WHOLESALE CORP (COST.NQ)
Target Price: US$760.00

About Costco Wholesale Corp

• The leading warehouse club, Costco has 815 stores worldwide

• It sells memberships that allow customers to shop in its warehouses, which feature low prices on a limited product assortment. Costco mainly caters to individual shoppers, but roughly 20% of paid members carry business memberships

Fundamental

• Costco reported strong Q1 earnings, beating estimates with earnings per share of $3.58 and revenue in-line at $57.8b

• Memberships have grown by nearly 8% in the past year

• Costco also shows no signs of slowing down for the foreseeable future. For the full fiscal year, they plan to open 33 locations

Technical

• Uptrend for this counter remains intact as all 3 MAs are still heading up

• Immediate support is around 680.00 where we see a clear turnaround of buyers being in control on 26 Feb as candlestick engulf the previous bar and closes slightly higher

• Some profit-taking can return around psychological level of 720.00 first

TAIWAN SEMICONDUCTOR (TSM.NY)
Target Price: US$145.00

About Taiwan Semiconductor

• Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices

• Also offers customer support and engineering services

• Its products are used in high performance computing, smartphone, Internet of things, automotive, and digital consumer electronics

Fundamental

• TSMC reported a strong 2023 Q4 earnings report

• Revenue declined 1.5% year-over-year due to the market conditions relative to the previous year, the sequential growth came in strong at 13.6%

• Company is forecasting the overall semiconductor market, excluding memory, to increase by more than 10% year-over-year in 2024

Technical

• 100d MA has recently crossed above 200d MA sloping up, with a huge gap up on 18 Jan, which is the immediate support zone to take note

• As long as price holds above the 128 - 130 support zone the nearer term uptrend strength could continue.

• Potential resistance around 145 where was the high in 2022

• Potential sideway consolidation can happen within 130 - 145 before attempting to break higher

APPLE INC (AAPL.NQ)
Target Price: US$220.00

About Apple Inc

• Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide

• In addition, the company offers various services, such as Apple Arcade, Apple Fitness+, Apple Music, Apple TV etc

Fundamental

• A notable 11.3% growth in service revenue, contributing 19.3% to overall group revenue

• Introduction of Apple Vision Pro, with major enterprises such as Walmart, Nike, Vanguard, Stryker, Bloomberg, and SAP already investing in the product

• Potential revenue contributions from Apple Vision Pro sales, projecting it to become a significant vehicle for Apple's service business

Technical

• Immediate support is around 180.00 where prices rebounded a few times since Dec 23

• Selling pressure returned near the psychological 200.00 which has been tested at least 3 times

• Both longer term MAs (100d and 200d) are starting to flatten out, potentially signaling a sideway consolidation

• If price is able to break and hold above 200, would not rule out more strength towards 220.00

SPDR SELECT SECTOR FUND - TECHNOLOGY (XLK)
Target Price: US$220.00

About XLK

• A SPDR Fund seeks to provide investment results that (before expenses) correspond generally to the price and yield performance of the Technology Select Sector Index

• Effective representation of the technology sector of the S&P 500 Index

Fundamental

• XLK has outperformed other sectors and has the potential for capital appreciation due to the rise of AI and productivity gains

• XLK's price-to-book multiple of 7.21x is much lower than its top five holdings which account for about 55% of the ETF's overall weight

Technical

• Price has breached above the 195.00 target stated in Nov 23

• New higher support at 197 has been found

• All 3 MAs are still heading up indicating uptrend is still intact

• If price is able to hold above new support, potential upside target towards 215.00 - 220.00

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