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.

Domestic inflation continues to persist even as market continues to push higher on the backs of several huge moves by local banks.

Consumer facing industries had seen a boost in sales levels and growth since Q1 of 2024 due to a series of concerts and hospitality events.

The growth trajectory for 2024 looks to be in place where analysts are expecting the economy to improve for the remaining of 2024, especially for the electronics sector.

However, as the economy continues to grow, interest risks continue to persist, where growth could potentially slow down.

With the index breaking above the 3,250 resistance recently (now turned support), we finally see a positive move above the 3,300 level, where the index had traded at its highest level since the start of 2024.

If the 3,300 new support level holds, upside toward 3,400 could be possible as we head into the earnings calls.

Hot News (Click to read):

• Delayed rate cuts expected to benefit Singapore banks’ otherwise uneventful Q1 earnings (The Business Times)

• Latest Singapore 6-month T-bill offering cut-off yield of 3.74% as applications dip (The Business Times)

United States

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

With the index experiencing weakness in April, the 38,000 level has continued to be tested and have indeed held up in the midst of Q2 2024. However, weakness is still present with the 20d MA pointing downwards. If 20d MA starts to flatten out, we may finally see the market stablize.

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 the index rebounding off the 5,000 psychological support, upside toward the 5,300 resistance could be observed if near term momentum buying interest returns.

As the market once again starts its earnings call season, investors are keeping a close eye on guidance given by management of companies to indicate whether they are expecting 2024 to be a year of growth or would there be a slippage in demand and slower growth.

With expectations of only one rate cut in 2024, coupled with a continuously optimistic market, caution should be exercised.

Hot News (Click to read):

• Central banks will probably only cut half as much as they

  hiked (The Business Times)

• WEF president: ‘We haven’t seen this kind of debt since the

  Napoleonic Wars’ (CNBC)

• Fed meeting recap: Powell pretty much rules out a hike as

  the central bank’s next move (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

OCBC BANK (O39.SI)
Target Price: S$15.00

About OCBC Bank

• OCBC Bank offers a comprehensive range of banking services and financial solutions in consumer banking, business banking, international banking, global treasury and investment management

• Currently has assets of S$151b and a network of over 370 branches and representative offices in 15 countries and territories

Fundamental

• Reached a historic high of S$13.5b, supported by a record net interest income of S$9.65b, up 25% YoY

• Final dividend increased to 42 cents per share, bringing the total FY23 dividend to 82 cents, up 21% from the previous year

• Loans grew by 29% to S$38.4b, surpassing the 2025 target ahead of schedule

Technical

• Uptrend remains intact with all 3 MAs heading higher

• New psychological support found around 14.00

• As long as support holds, potential upside target towards 15.00 where some selling pressure could return

• Immediate temporary resistance appears to be around 14.50 where we see long upper shadow returning indicating bears are taking control

ST ENGINEERING (S63.SI)
Target Price: S$4.20

About ST Engineering

• Singapore Technologies Engineering Ltd provides solutions and services in the aerospace, electronics, land systems, and marine sectors

• Operates through the following business segments: Commercial Aerospace, Urban Solutions and Satcom and Defence and Public Security

Fundamental

• Revenue surged 11.8% to S$10.1b, with growth across all segments

• Operating profit rose 24.4% to S$914.7m, despite a divestment loss

• Generated positive free cash flow of S$562.6m, reversing prior year's outflow of S$293m

• Net profit grew 9.6% to S$586.5m, despite a 53% increase in finance costs due to higher interest rates

Technical

• ST Eng has been in a sideway consolidation since Aug 23 with price capping below the resistance around 3.90

• Price broke above resistance 3.90 and turn support with 20d MA crossing above 100d MA, indicating short-term strength

• As long as price manage to hold above 3.90 with all 3 MA heading up, potential upside strength towards 4.20 first which was tested in Mar and May 2022

COMFORTDELGRO (C52.SI)
Target Price: S$1.60

About ComfortDelgro

• ComfortDelGro Corporation Limited delivers public transportation solutions globally

• Its business segments cover Public Transport, Taxi/PHV, and Inspection and Testing Services

• The company offers bus, rail, taxi, and coach rental services, as well as vehicular maintenance and repair

Fundamental

• CDG's net profit surged to S$102m in 2H23, up 76.5% from the previous year

• Gojek and CDG partnership aims to boost driver earnings and ride availability, benefiting both drivers and commuters

• Recent GBP422m contract acquisitions in the UK signify significant expansion in the London market

• Mitigates energy price fluctuations through effective hedging policies

• Prioritizes leveraging its public transport expertise to secure new tenders in existing and new markets

Technical

• Uptrend reversal started playing out in July 23 with a confirmation when 100d MA crossed above 200d MA in Sep, together with the break above the resistance of 1.30 back then

• Uptrend remains intact for now, with new immediate support around 1.45

• Potential upside towards 1.60 if support is able to hold

STARHUB (CC3.SI)
Target Price: S$1.28

About StarHub

• StarHub Ltd offers communication and entertainment services in Singapore through its Telecommunications and Cyber Security segments

• It provides television subscription, broadband access, and information security solutions, alongside network security surveillance services

Fundamental

• Ensign InfoSecurity, co-owned by Temasek (60%) and StarHub (40%), serves Singapore's public sector, specializing in system integration. StarHub extended its rights over Ensign for 2 more years, with termination set for Oct 4, 2025

• StarHub also contributes to Singapore's Smart Nation initiative as a regional smart city service provider, building digital infrastructure

• The company will pay a dividend of SGD0.042 on May 16th, up from 2023. While the payout ratio was 82% in 2023, this may limit reinvestment and pose risks if earnings decline

Technical

• Longer-term uptrend looks good with both 100d and 200d MA pointing up

• Key support level is around 1.14 where prices has been kept below since Sep 2022

• Price has recently gap down due to the dividend adjustment

• If price can break and hold firmly above 1.22, first level of upside towards 1.28 where some profit-taking may return

United States Stocks Spotlight

NOVO NORDISK A/S (NYO.NY)
Target Price: US$136.00

About Novo Nordisk

• Novo Nordisk A/S operates in pharmaceuticals, primarily focusing on diabetes and obesity care, cardiovascular diseases, and rare blood disorders

• It offers a wide range of products including insulin pens, growth hormone pens, and smart solutions for diabetes treatment

Fundamental

• Wegovy's FDA approval highlights Novo Nordisk's leadership in the obesity market and its potential Medicare coverage

• Sales climbed nearly 19% to $9.36b, topping analysts' projection for $9.13b. On an adjusted basis, earnings surged about 25% to 81 cents per share

• NVO plans aggressive expansion of manufacturing capabilities, including a new $6b plant in Denmark, a $11b acquisition of fill/finish plants, and expansions in France and China

Technical

• Long term uptrend remains intact with some short-term weakness as 20d MA start to flatten out near the temporary support around 122.50

• Key support around 112 and immediate resistance is around 136

• If temp support fails to hold, we may see more selling pressure back towards 117 first where the 100d MA is residing

WELLS FARGO & COMPANY (WFC.NY)
Target Price: US$62.00

About Wells Fargo & Company

• Provides diversified banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally

• Operates through four segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management

Fundamental

• Maintained its prior full-year guidance for a 8% decline in full-year net interest income.

• Strong on the non-interest income/investment banking front recording strong growth in investment banking, investment advisory fees, and trading activity profits

• Raised its dividend from 30 cents to 35 cents per quarter

Technical

• Price looks to be testing the key psychological level around 60.00 after sellers regained control around 62.00

• If short-term weakness continues, may see price head back towards its consolidation range around 56.00 - 58.00

• Longer-term uptrend remains intact as long as price is able to hold above 56.00

COLGATE-PALMOLIVE (CL.NY)
Target Price: US$94.00

About Colgate Palmolive

• Colgate-Palmolive manufactures and sells a wide range of consumer products globally, focusing on oral, personal, and home care as well as pet nutrition

• The company's extensive brand portfolio includes Colgate, Darlie, Palmolive, and Hill's, catering to diverse consumer needs

Fundamental

• Achieved organic sales growth across all product categories and divisions, driven by volume and pricing increases

• Maintained market leadership in oral care, personal care, and home care segments, with toothpaste commanding a 41% market share and manual toothbrushes at 31.5% globally

• Recently raised dividend by 4%, reflecting Colgate's commitment to consistent dividend growth and providing stability amid market fluctuations

Technical

• Price broke and held above the key psychological resistance around 90.00 and now has become the immediate support

• Price is still forming higher lows since Oct 23 indicating uptrend is intact, with confirmation from the MAs

• If price is able to hold firmly above 90.00, would not rule out more upside towards 94.00

ELI LILLY AND CO (LLY.NY)
Target Price: US$880.00

About Eli Lilly and Co

• 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

• Posted another strong earnings report

• Q1 non-GAAP EPS of $2.58 topped Wall Street estimates of $2.49 while revenue of $8.77b, up 26% from year-ago levels, was a slight miss

• Anticipating 2024 full-year revenue to come in at $2.0b with operating EPS to be in the range of $13.50 to $14.00, sharply higher than the $12.46 consensus

Technical

• Price has broken and holding well above our target of 680.00 previously

• Uptrend is still intact as all 3 MAs are heading higher immediate psychological resistance is around 800.00 where we see some selling pressure returning as price neared it over the past trading sessions

• Rising window support intact, if the 800.00 resistance gives way, upside toward 880.00 reiterated

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