Markets Insights

All eyes on earnings season and non-oil export figures

A Hangzhou Iron & Steel Group Company workshop in Hangzhou in China's Zhejiang province. Economic figures from China today, such as for industrial production, could play a part in swaying market sentiment here.
A Hangzhou Iron & Steel Group Company workshop in Hangzhou in China's Zhejiang province. Economic figures from China today, such as for industrial production, could play a part in swaying market sentiment here.PHOTO: REUTERS

After last week's series of corporate deals, this week will give traders clearer market direction

Corporate earnings are set to hold the stage for traders here this week as reporting season kicks into place. This would offer more guidance for the local market after the series of corporate deals in the limelight last week and the dovish statement from United States Federal Reserve chairman Janet Yellen that spurred sentiment globally.

"Market participants are waiting for earnings season to paint a clearer picture of market direction over the next few weeks, as (the) focus now shifts to companies' mid-year reports," said CMC Markets Singapore market analyst Margaret Yang in a note.

A number of Reits, such as Keppel Reit, CapitaCommercial Trust, Hutchison Port Holdings Trust and Ascott Reit, will announce results this week, starting today.

Others to look out for include M1, which is due to release its earnings report tomorrow, followed by Keppel Corporation on Thursday and Sats on Friday.

On the economic data front, Singapore's June non-oil domestic export figures - a key indicator for economic outlook - will be out today. Moody's Analytics said in a report that it expects non-oil domestic exports growth to have bounced back to 3 per cent year on year in June, after declining 1.2 per cent in May.

"May's decline in exports was the consequence of anomalies in the data rather than a clear signal of softening demand for Singapore's production," it noted.

"Pharmaceuticals exports, which fell in May because of high base effects, should have improved in June. Electronics exports will continue to be the main positive for the headline figure."

MID-YEAR RESULTS

Market participants are waiting for earnings season to paint a clearer picture of market direction over the next few weeks, as (the) focus now shifts to companies' mid-year reports.

CMC MARKETS SINGAPORE MARKET ANALYST MARGARET YANG, on what traders will be on the lookout for this week.

A slew of economic numbers from China today, including that for second-quarter gross domestic product and industrial production, could also play a part in swaying market sentiment.

The benchmark Straits Times Index rose 51.76 points, or 1.6 per cent, to 3,287.43 last Friday to hit its highest in about two years, marking a sturdy 58.42-point, or 1.8 per cent, gain for the week.

Much of the attention was on corporate acquisitions. Last Thursday, a consortium led by Perennial Real Estate Holdings and Yanlord Land Group said it has bought a 33.5 per cent stake in United Engineers (UE), one of the oldest companies in Singapore, at $2.60 a share. The consortium plans to make a mandatory general offer for the rest of UE at the same price.

Perennial gained 1.7 per cent, or 1.5 cents, to 90 cents last Friday, while Yanlord Land eased 0.6 per cent, or one cent, to $1.715. UE sank 1.5 per cent, or four cents, to $2.67.

But the bigger deal for the market was probably the privatisation bid for warehouse provider Global Logistic Properties. The stock rocketed 21.9 per cent or 59 cents to $3.29 in heavy trade last Friday after the group announced it has picked the $3.38-per-share acquisition offer from a Chinese consortium following a months-long sale process.

A version of this article appeared in the print edition of The Straits Times on July 17, 2017, with the headline 'All eyes on earnings season and non-oil export figures'. Print Edition | Subscribe