Welcome to the latest edition of top stock market highlights.
Nvidia Corporation (NASDAQ: NVDA)
Nvidia provided strong guidance that saw its shares jump 24.4% to a one-year high of US$379.80.
The company is the biggest manufacturer of the advanced microchips required to power a new generation of artificial intelligence (AI) services known as generative AI, popularised by the chat program ChatGPT.
ChatGPT, a technology developed by OpenAI, a company in which Microsoft (NASDAQ: MSFT) invested, is part of a new generation of search engines that can provide detailed responses with just a few simple prompts and keywords.
Already, Microsoft is incorporating ChatGPT into its new Bing search engine while technology behemoth Alphabet (NASDAQ: GOOGL) has developed Bard, a conversational AI service that is also powered by large language models.
For the first quarter ending 30 April 2023 (1Q 2023), Nvidia saw its revenue dip by 13% year on year to US$7.19 billion.
However, operating and net profit were up 15% and 26%, respectively, to US$2.1 billion and US$2 billion.
The microchip manufacturer is also paying out a quarterly cash dividend of US$0.04.
Above all, it was Nvidia’s second-quarter revenue outlook of US$11 billion that got the market excited.
Prior to the announcement, analysts had estimated that revenue would come in at US$7.15 billion, so the outlook beat even the most bullish forecasts.
The company is boosting supply to meet demand for more AI chips and if it manages to meet this forecast, it will represent a massive 64.2% year on year surge in revenue from the second quarter of fiscal 2023.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, has kept itself busy in the past week with two collaborations with other stock exchanges.
The bourse operator has deepened its relationship with Shanghai Stock Exchange (SSE) with the signing of a memorandum of understanding (MOU) to launch an SSE-SGX exchange-traded fund (ETF) link.
Both exchanges will jointly develop and promote the ETF markets in both countries using a master-feeder fund model.
Through this MOU, SGX will extend the range of ETFs available for the listing of feeder funds between China and Singapore.
This new link follows the listing of three ETFs in 2022 when SGX collaborated with the Shenzhen Stock Exchange and saw daily turnover for China equities ETFs for the first quarter of 2023 jump more than 50%.
SGX also teamed up with the Stock Exchange of Thailand (SET) to launch Singapore Depository Receipts (SDRs) under a depository receipt (DR) linkage.
SDRs will launch on 30 May following an MOU signed between SET and SGX and is the first exchange-level DR in ASEAN.
These SDRs will provide investors in Singapore with opportunities to invest in regional stocks and will trade on SGX during local trading hours and in Singapore dollars.
Three SDRs, issued by Phillip Securities Pte Ltd, will form the inaugural batch of SDRs to be launched and represent a beneficial ownership interest in Airports of Thailand (BKK: AOT), CP All (BKK: CPALL), and PTT Exploration and Production (BKK: PTTEP).
This trio of stocks are all constituents of the benchmark SET50 Index.
The Japanese stock market
Just this week, the Japanese stock market’s Nikkei hit a fresh 33-year high, touching the level of 31,352 for the first time since August 1990.
The more-than-three-decade wait is one of the longest for any major economy to claw back its losses after a steep and punishing decline.
Even during the Great Depression in the US in 1929, share prices regained their pre-collapsed highs within 25 years.
For Japan, 1990 saw the market begin a steady and persistent decline after Japanese shares traded at eye-watering valuations of more than 60 times price to earnings, well above the then-global average of just 14 to 16 times.
Many factors contributed to this sharp fall – the strong Japanese yen, low economic growth, and Japanese companies’ resistance to change.
Let us hope that the Singapore stock market does not have to wait either 25 or 33 years to revisit its previous peak reached in 2007.
The Straits Times Index (SGX: ^STI) hit its all-time high of around 3,815 back in October 2007, just before the onset of the Global Financial Crisis.
Almost 16 years later, the benchmark has yet to regain its peak and the count continues.
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Disclosure: Royston Yang owns shares of Singapore Exchange Limited and Alphabet.