Singapore’s Straits Times Index (SGX: ^STI) ended the week on a positive note, closing at 3,744.7 points, marking a 20-point rise or a modest 0.5% gain compared to the previous week. Singapore’s three local banks saw mixed results this week. DBS and OCBC recorded slight declines, while UOB bucked the trend with a modest gain. Read more about our thoughts on the stock market post-election here.
First Resources: Profit Growth on Stronger Margins
Leading palm oil producer First Resources (SGX: EB5) reported a solid performance for the third quarter ending September. The company, which manages over 200,000 hectares of oil palm plantations in Indonesia, saw its net profit rise 19.3% year-on-year to US$61 million, up from US$51.1 million in the same period last year.
The profit increase was attributed to higher average selling prices and improved processing margins. First Resources’ stock ended the week at $1.52.
CapitaLand Ascendas REIT: Strategic Expansion
CapitaLand Ascendas REIT (SGX: A17U) announced plans to acquire a U.S. land parcel for S$94.8 million to develop a logistics property. The acquisition will be financed through internal resources and/or existing debt facilities. Despite the strategic move to expand its portfolio, the announcement coincided with a 1.5% dip in its share price, closing at $2.57.
Venture Corporation: Navigating Headwinds
Venture Corporation (SGX: V03) rose 3.1% during the week, adding S$0.38 to close at S$12.79. However, its third-quarter results painted a mixed picture. The company’s revenue declined 3.9% to S$689.7 million, and net profit fell 4.7% to S$60.6 million quarter-on-quarter, primarily due to weaker demand in key sectors, including life sciences and consumer tech.
Despite the softer demand, Venture Corporation maintained its strong operating cash flow, with a net cash position increasing by S$138 million compared to December 2023. The company expects second-half 2024 revenue to remain stable compared to the first half.
U.S. Markets: A Broad Retreat
In the U.S., markets faced a sharp pullback this week as Federal Reserve Chair Jerome Powell emphasized a cautious approach to interest rate cuts. The S&P 500 dropped 2% over five sessions, erasing half of the gains it had achieved since its post-election rally.
This downturn, coupled with losses in corporate credit and commodities, marked the worst week for global assets in 13 months. Notably, the Nasdaq 100 fell more than 2% on Friday.
Alibaba: Cloud and Overseas Growth Power Earnings
Amid the U.S. market’s struggles, Alibaba Group Holding stood out as a bright spot. Its New York-listed stock gained 5% in pre-market trading after the company surprised analysts with a sharp rise in quarterly profits.
Alibaba’s net income surged 58% to 43.9 billion yuan (US$6 billion), well above analyst expectations of 25.7 billion yuan. The profit boost was driven by strong performance in its cloud computing and offshore e-commerce segments, which offset sluggish domestic retail sales caused by a consumption slowdown in China. However, revenue rose 5% to 236.5 billion yuan, slightly missing Bloomberg’s consensus estimate of 239.4 billion yuan.
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Joanna Sng owns shares of UOB, OCBC, DBS, CapitaLand Ascendas REIT, and Alibaba.
