As Singapore approaches National Day on August 9th, a day imbued with patriotic fervor and national pride, the market braces for a continuation of corporate earnings releases across sectors such as real estate investment trusts (REITs), industrial, and financial services.
Prominent Straits Times Index constituents, including DBS Group Holdings Ltd (SGX:D05), Singapore Exchange Ltd (SGX) (SGX:S68), Sembcorp Industries Ltd (SGX:U96), and Venture Corporation Ltd (SGX:V03), are set to unveil their financial narratives.
We anticipate DBS, the titan among Singapore’s banking institutions, to report a net profit of S$2.8 billion for the second quarter of 2024 (2Q24F), a 6% decline quarter-on-quarter (QoQ) but a 4% increase year-on-year (YoY). Despite the net interest margin likely remaining steady at 2.14%, the bank’s treasury income may have softened due to the absence of seasonal positivity and one-off foreign exchange hedging gains seen in 1Q24.
SGX is forecasted to report a core net profit of approximately S$269 million for the second half of FY2024 (2H24F), reflecting a 7% increase QoQ and a stable YoY performance, driven by seasonally higher trading volumes and consistent treasury income, bolstered by the prevailing elevated interest rate environment.
In the realm of REITs, entities such as Manulife US REIT (SGX:BTOU), Cromwell European REIT (SGX:CWBU), Sasseur REIT (SGX:CRPU), Elite UK REIT (SGX:MXNU), and Paragon REIT (SGX:SK6U) are likely to report lower distribution per unit (DPU) YoY, due to divestment strategies, higher interest expenses, and currency fluctuations.
In the industrial sector, Sembcorp Industries is expected to report a net profit of approximately S$480 million for 1H24F, a 20% YoY decline but a 15% increase half-on-half (HoH), supported by a steady renewable energy contribution. Venture Corporation is anticipated to post a net profit of S$69.6 million for 2Q24F, a 15.8% increase QoQ and a 4.8% increment YoY.
On the economic data front, the S&P Global Singapore Purchasing Managers’ Index (PMI) for July will shed light on the manufacturing sector’s health. The PMI climbed to 55.2 in June, accelerating from 54.2 in May, driven by a pronounced uptick in new businesses.
Retail sales data for June will also be of interest, with May figures showing a 2.2% YoY increase, rebounding from a 1.2% decline in April. On a seasonally adjusted monthly basis, retail sales rose by 2.4% in May, recovering from a downwardly revised 2.6% drop in April.
Additionally, Singapore’s foreign exchange reserves for July will be revealed, having ascended to S$503.71 billion in June. This marks the highest level since April 2022, driven by increases in gold, foreign exchange, and IMF reserve positions.
The market also anticipates the results of the Automobile Certificate of Entitlement (COE) open bids. The COE categories in focus are Category A for cars up to 1600cc and 97kW, Category B for cars above 1600cc or 97kW, and Category E, an open category.
The unfolding of these corporate results and economic indicators will collectively sketch the trajectory of Singapore’s economy, equipping investors with pivotal insights to navigate their investment strategies and anticipate market dynamics in the week ahead.
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
Reference
Singapore Strategy | Positioning for 2QCY24 reporting season
