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.

After a last burst of energy, the index rallied higher during the last trading day of 2023, the broad market seems to have lost momentum amidst the heavy profit taking that came in during the first week of 2024.

These price actions were very similar across the Asia markets, where major indices had seen selling pressure came in, historically January has been recorded as one of the worst months for the stock market.

However, with volume picking up gradually, some opportunities could arise where investors could be picking some longer term holdings on the recent dip.

It looks like STI has been capped at 3,250 level where sellers have returned to push prices back to retest the support at 3,150.

We saw some short-term strength returned over the past week, resulting in a rally right before 2023 market closed, further supported by the sharp rise in 20d MA. This is likely due to the investors pricing in the flurry of interest rate cuts in 2024.

Hot News (Click to read):

• Latest T-bill yield rebounds slightly to 3.74% amid buoyant demand (The Business Times)

• Losses loom as Shopee, Lazada brace for bruising 2024 in South-east Asia (The Business Times)

United States

Dow Jones Industrial Average (DJIA) tracks the daily price movements of 30 large, public-owned blue-chip American companies. Price has rebounded from the immediate support of 36,800 - 37,000 and continued to rally higher. Temporary selling pressure may surface near the 38,000 psychological level first.

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.

S&P 500 is currently back at its record high seen at the start of 2022. If price is able to break and hold above the immediate resistance of 4,800, upside target can be revised to the key psychological level of 5,000.

In general, market ended the year on a high note with the Federal Reserve signaling the end of interest rates hike.

With the earlier predictions of a US recession failing to materialize in 2023 as we move into 2024, investors’ attention has not broadened to other events such as continuation of the Russian-Ukraine war, corporate earnings and US presidential election.

Hot News (Click to read):

• Friday’s jobs report will be a big signal for a market looking for good news (CNBC)

• Fed’s favorite inflation gauge shows prices rose at 3.2% annual rate in November, less than expected (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

FOOD EMPIRE (F03.SI)
Target Price: S$1.30

About Food Empire

• Food Empire Holdings Ltd. operates as a global branding and manufacturing company in the food and beverage sector. The firm's products include instant beverage products, frozen convenience food and snack food

• Proprietary brands are MacCoffee, Café PHO, Petrovskaya Sloboda, Klassno, Kracks and OrienBites

Fundamental

• Net profit after tax of S$15.7m in Q3, a decline of 30.6% from S$22.6m in Q3 2022

• Drop in profit to the absence of a one-off gain of S$15m from the disposal of a non-core asset recorded in the year-ago quarter

• Revenue for the three months ended Sept. 30 slipped 1.6% YoY to S$106.8m , due to the depreciation of the Russian currency

Technical

• Overall long term uptrend is still intact as price is trading above all 3 MAs. Furthermore, 100d and 200d MA remain in an upward sloping direction

• Support remains at around 1.05 and resistance is around 1.18

  Multiple tweezer tops pattern appeared near the resistance level over the past months

• If price is able to breach and hold above resistance, may see potential strength towards 1.30

OUE (LJ3.SI)
Target Price: S$1.28

About OUE Ltd

• OUE Ltd engages in the ownership, development, and operation of real estate properties

• Operating through the following segments: Property Investments, Hospitality, Property Development, Healthcare, Consumer, and Others

Fundamental

• During five years of share price growth, OUE moved from a loss to profitability

• OUE has been growing earnings at an average annual rate of 10.3%, however revenues has been declining at the rate of 13.5% per year

• After the dividend cut in 2020, the company had gradually raised its dividend higher again, which is a good sign that the company

• ROE stands at around 5% which is lower than its competitors

Technical

• Prices recently tested the 1.20 resistance level where profit taking happened

• The 1.10 support continues to be the support to monitor as prices could dip close to this level

• With prices trading above the 20d and 100d MA, which are also sloping up, indicating signs of a potential uptrend reversal if prices are able to breach and hold above the 1.20 level.

AZTECH GLOBAL (8AZ.SI)
Target Price: S$1.10

About Aztech Global

• Aztech Global Ltd designs and manufactures IoT devices, data communication products and LED lighting products

• Suppling LED lighting products to government institutions and customers in the commercial and public sectors

Fundamental

• Revenue has been growing steadily over the past 5 years, driven by sales of internet of things devices and data communication products

• Posted a net profit of SG$30.9m in the third quarter, an increase of 48.6% from SG$20.8m a year earlier

• Earnings per share rose 48.7% to SG$0.04 during the period, from SG$0.0269 in the year-ago period

Technical

• Firm support seems to have been established at the 0.90 level where buying interest came in previously

• 20d MA has also rebounded close to the 0.90 level indicating that buyers are keen to keep prices above this level

• 3 MAs has been sloping upward indicating longer term uptrend is intact at this point

• Any firm break above the 1.00 level could see a new support being formed, where 1.10 could be the next target

GLD US$ (O87.SI)
Target Price: US$200.00

About GLD US$

• ETF managed and marketed by State Street Global Advisors

• Designed to initially track the price of a tenth of a troy ounce of gold

Fundamental

• Gold provides a natural hedge against inflation and is regarded as a safe-haven investment during downturns in the economy

• Trading GLD shares in the secondary market or via a Trust may be lower than the costs associated with buying, storing and insuring physical gold in a traditional allocated gold bullion account

• Inverse relationship between gold prices and US dollar

Technical

• Price was testing the immediate resistance around 190.00, where selling pressure came back

• 20d MA has surged over 100d and 200d MA indicating short-term strength since early Nov 2023

• 182.00 key support level is currently in line with the longer term moving average signaling that this could be a key level to take note of

United States Stocks Spotlight

BERKSHIRE HATHAWAY INC (BRK.B.NY)
Target Price: US$390.00

About Berkshire Hathaway Inc

• Globally involved in insurance, freight rail transportation, and utilities

• Offers a range of insurance services and operates rail systems in North America

• Established in 1998, headquartered in Omaha, Nebraska

Fundamental

• Berkshire's equity investments (excluding Kraft Heinz and Occidental) increased by $37.5b , primarily due to gains from Apple

• Diverse business segments, such as insurance underwriting, investment income, BNSF earnings, BHE, and other businesses, contributed to overall operating earnings at Berkshire Hathaway

• The technology sector, fueled by Apple holdings, is thriving, while industrial, financial, and energy investments show relatively flat or declining performance

Technical

• Overall uptrend is still intact with all 3 MAs gently sloping upwards, together with upward sloping channel support line still remain intact

• Immediate support around 350.00 where price retested it multiple times since Aug 23

• Resistance remains to be around 370.00 where selling pressure have returned, potential upside strength towards390.00, if price is able to break and hold above resistance

ELI LILLY AND COMPANY (LLY.NY)
Target Price: US$680.00

About Eli Lilly and Company

• Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide

• Company overtook the market leader last year and is currently one of the most valuable drug producers in the world

Fundamental

• $8.3b in revenue with around 28% YoY growth due to a 29% increase in volumes

• Gross margin remained flat at ~80% from last year, non-GAAP earnings jumped ~69% YoY to $2.11 per share

• Increased its full-year guidance for revenue and adj. EPS to $33.4b–33.9b and $9.70–9.90, compared to $31.5b and $8.75 per share in previous consensus

Technical

• Uptrend remains intact and it has hit our previous target of US$620.00 as mentioned in Sep 23 newsletter

• Immediate resistance is around $640.00, where we saw many long upper shadows occurring, indicating that sellers are in control, while immediate psychological support is around $600.00

• Potential upside target to be revised to $680.00 if price is able to break and hold above resistance

CARDINAL HEALTH (CAH.NY)
Target Price: US$116.00

About Cardinal Health

• Cardinal Health, a global healthcare company, operates in 40+ countries, specializing in pharmaceutical distribution, medical products, and manufacturing. Revenue is generated through the sale of these products and related services

Fundamental

• Robust earnings signify growth across various areas.

• Cost-cutting measures boost results and expand profit margins

• Bold growth projections anticipate strong revenue and profitability

• Positive trends in pharmaceutical revenue and profit, fueled by factors like the COVID-19 vaccine and an expanding generics program

• Management's guidance indicates potential double-digit upside

• Attention to interest rate exposure due to negative equity and monitoring upcoming debt maturity

Technical

• Long term uptrend intact with some short-term weakness as depicted by the downward pointing 20d MA

• Recent new psychological support has formed around 100.00

• Resistance appeared to be around 108.00 where selling pressure has returned, potential upside target towards 116.00 if price is able to break and hold above resistance

NEW YORK TIMES CO (NYT.NY)
Target Price: US$50.00

About New York Times Co

• The New York Times Company delivers news and information globally across various platforms

• It licenses articles, graphics, and photographs to various media outlets and content to digital aggregators in business, professional, academic, and library markets

Fundamental

• The New York Times and Apple's agreement to feature The Athletic on Apple News+ is anticipated to benefit both

• Positive financial results include a substantial rise in revenue, paid subscribers, and net profits

• Debt-free with significant cash and investments, the company is well-positioned for future growth

Technical

• Overall uptrend is still intact with all 3 MAs heading higher together with upward sloping channel support line and higher lows forming

• Immediate support is around 44.50 - 45.00 where price has been capped below since Apr 22

• If immediate psychological resistance around 49.50 - 50 broken and price can hold above it with good volume, potential upside target to be revised to $52.00

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