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.

Ministry of Trade & Industry (MTI) maintained its full-year 2024 GDP growth forecast of 1-3%, expecting a gradual recovery in the manufacturing and trade-related sectors.

The electronics sector is projected to improve, driven by demand for semiconductors used in smartphones, PCs, and AI. However, potential risks include geopolitical tensions and persistent inflation in advanced economies could disrupt global supply chains and financial systems.

Both OCBC and DBS banks forecast Singapore's GDP growth for 2024 to be around 2%, emphasizing the importance of the electronics sector and the positive outlook from recent business surveys and trade data.

With the 3,300 resistance giving way, a new support has been formed as buyers came in to push prices higher to close out the month of May.

With some strength finally showing within the Singapore market, propped up with net inflows of funds into the SG market, upside toward the 3,400 resistance possible, paving the way for the longer term uptrend to form.

Hot News (Click to read):

• China’s Industrial Profits rise as overseas demand improves
  (The Business Times)

• Latest Singapore 6-Month T Bill cut-off yield falls to 3.65%
  (The Business Times)

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

Selling pressure came in after prices tested the 40,000 psychological resistance level, with temporary support around the 38,500 level right now, with 20d MA still pointing up alongside the 100d and 200d MA indicating uptrend is still intact.

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.

Recently testing new highs, the S&P500 continues to push higher amidst positive sentiments in several key sectors in the market. However with little consolidation, may wish to exercise caution if the 5,250 support level is broken where sellers could potentially come in once more.

With the Fed continuously reiterating that they require more positive data that inflation is softening before supporting rate cuts.

Data released earlier in May showed that the U.S. Consumer Price Index came in at 3.4% for April on an annual basis. This was a slight dip from March’s 3.5% figure, and far below the 9.1% reading recorded in June 2022 when the inflation cycle peaked but also remained above the Fed’s 2% target.

Hot News (Click to read):

• The Fed probably won’t be delivering any interest rate cuts this summer (CNBC)

• CPI report shows inflation easing in April, with consumer prices still rising 3.4% from a year ago (CNBC)

Singapore Stocks Spotlight

YZJ SHIPBLDG (BS6.SI)
Target Price: S$2.50

About YZJ Shipbldg SGD

• YZJ Shipbuilding is one of the largest and most reputable shipbuilding companies globally, with a strong track record in constructing various types of vessels, including bulk carriers, containerships, and offshore vessels

• It operates across multiple segments, including shipbuilding, investments, shipping, and trading

Fundamental

• Revenue increased from $3.76b in 2022 to $4.5b in 2023 and the TTM period, representing a 16.5% Y-o-Y growth

• Net income rose from $535m to $777.56m

• Total assets increased significantly from $6.36b to $7.6 Y-o-Y indicating asset growth

• Free cash flow to equity increased from $761.29m to $1.365b Y-o-Y

Technical

• New immediate support found at the psychological 2.00 with an intact longer term uptrend (100d and 200d MA still heading up)

• Short-term weakness returned in mid-Apr 24 but buyers came back around 1.70 and bounced off the 100d MA

• Expecting to see some selling pressure return near 2.50, can consider to lock in some profits along the way

GLD US$(O87.SI)
Target Price: US$226.00

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 has reached out previous target of US$216 stated in our Apr 24 Newsletter

• Based on recent price action during end Apr to early May, immediate support looks to be around 212 where buyers can potentially return

• Resistance appears to be around 226 - 227

• Could potentially see some short-term consolidation as 20d MA has started to flatten out and head sideways

DYNA-MAC (N04.SI)
Target Price: S$0.48

About Dyna-Mac

• Dyna-Mac Engages in the provision of engineering, procurement, fabrication, construction and onshore pre-commissioning and commissioning of offshore topside modules and facilities

• Operates in two segments - Module Business (construction for energy facilities) and Ad-hoc Projects ( hulls and pipelines)

Fundamental

• Revenue grew 32% Y-o-Y from S$291.47m to $385.17m reflecting the company’s successful expansion and increased market demand

• EPS has more than doubled to S$0.02724 from S$0.01250 indicating strong earnings growth

• There is also improvement in operating margins from 2022 to 2023 with +0.93 percentage points

• The company has also improved its debt-to-equity ratio from 70.11% to 67.89% Y-o-Y implying reduction in financial risk

Technical

• Revised target from $0.45 to $0.48 from our Sep 23 Newsletter

• 100d MA has crossed above 200d MA in early May providing more confirmation for the uptrend formation

• Price is currently testing the immediate psychological level at 0.40

• Price has broke above 0.40 in Apr for a few weeks but bears were still in control pushing price back down to retest support around 0.340

• Potential upside target towards 0.480 if price can breach and hold firmly above 0.40

United States Stocks Spotlight

NVIDIA (NVDA.NQ)
Target Price: US$1250.00

About Nvidia

• NVIDIA Corp. engages in the design and manufacture of computer graphics processors, chipsets and related multimedia software

• Operating through the following segments; Graphics, Processing Unit (GPU), Tegra Processors

• Founded in 1993 and is headquartered in Santa Clara, California, with a global presence in markets like the United States, Taiwan, China, and Hong Kong

Fundamental

• Nvidia reported stellar Q1 2024 results, with revenue of $26.0b (up 262% year-over-year) and EPS of $5.98, beating expectations

• Data Center revenue was a standout at $22.6b (up 427% YoY), driven by strong demand for NVIDIA AI chips and systems

• Nvidia announced a 10-for-1 stock split, making shares more accessible to retail investors, ex-date 7 June 24

• The company is supply-constrained currently but is ramping up production to meet booming demand for its AI offerings

Technical

• Price has broken and holding well above our target of $1000 set out in our Mar 24 newsletter, do remember to take some profits along the way

• Uptrend remains intact as long as price holds above 960.00

• 20d MA is also pointing upwards implying strong short-term momentum, coupled with above average volume, would not rule out more upside towards 1250 if price able to hold above 1105

GE AEROSPACE (GE.NY)
Target Price: US$184.00

About GE Aerospace

• GE Aerospace, formerly known as General Electric Company, is a leading manufacturer of commercial and military aircraft engines, engine components, and aircraft systems

• GE Aerospace offers aftermarket services and support for its products, including maintenance, repair, and overhaul (MRO) services

Fundamental

• Reported strong Q1 2024 results, with revenue up 15% Y-o-Y and earnings per share also increasing

• Free cash flow more than doubled Y-o-Y to $1.7b in the Q1 2024

• Total orders increased 34% to $11b in Q1, driven by robust demand across both commercial and defense markets

• As a pure-play aerospace company post the GE corporate split, GE Aerospace can focus solely on its core aviation strengths

Technical

• Long term uptrend remains intact with 100d and 200d MA still pointing up

• 20d MA has started to flatten, coupled with sideway price consolidation between 158.00 to 170.00 indicate potential short-term weakness

• If price can break and hold above 170 resistance, may see more strength returning towards 184 - 185

AMAZON.COM INC (AMZN.NQ)
Target Price: US$220.00

About Amazon.Com Inc

• Amazon is a global e-commerce and technology company that engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores

• Its core businesses include e-commerce marketplaces, third-party seller services, AWS cloud offerings, digital content/media, and consumer devices like Kindle and Echo

Fundamental

• Amazon's revenue for the first three months of the 2024 totaled $143.3 billion, representing a 13% increase compared to the same period last year

• Profitability metrics are solid, with an operating margin of 4.76% and profit margin of 3.62% on a trailing twelve-month basis

• Company's return on equity (ROE) stands at a healthy 10.97%, indicating efficient use of shareholder capital

Technical

• Uptrend remains intact with all 3 MAs heading upwards

• Immediate resistance remains to be around 190 where sellers returned as seen in Apr & May 24, as well as Jul and Nov 21

• Rising window gap from 160 - 165 serves as a key support zone to monitor

• If price can breach and hold above resistance, potential upside target towards 220.00

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