As the local corporate results season gets into full swing this week, investors will be on the lookout for fresh signs of sluggish economic growth, a challenging operating environment and stress on earnings.
This week, blue chips such as Keppel Corp, CapitaLand Commercial Trust and Sats will report results followed by the likes of Singapore Airlines, Singapore Exchange and the local banks next week.
To add to the data for investors to digest, Singapore's June export figures are due out today.
"The few companies that have reported their earnings (last week) already showed us what to expect. Weak top-line growth is here to stay as companies continue to adjust to the new normal of persistently slow economy," KGI Fraser Securities trading strategist Nicholas Teo told The Straits Times.
M1's net profit dropped 7.5 per cent for the three months to June 30 while revenue slipped 13.2 per cent. Full-year net profit after tax is expected to see a single-digit fall, the telco said last Friday.
And recent macro-economic signals were mixed at best. In China, the second quarter growth of 6.7 per cent was marginally above expectations, but private investment growth dipped to a record low.
Singapore's second-quarter growth of 2.2 per cent was a touch better than the first quarter's 2.1 per cent, but few economists are optimistic, with Mr Irvin Seah at DBS still forecasting a meagre 1.5 per cent expansion for 2016.
How Keppel businesses have fared against this uncertain backdrop will be a key market focus.
Keppel DC Real Estate Investment Trust and Keppel Infrastructure Trust will announce their results today, followed by Keppel Reit tomorrow, Keppel Telecommunications & Transportation on Wednesday and Keppel Corp on Thursday.
Keppel Corp's financial figures are unlikely to impress just months after reporting a 41.5 per cent net profit drop in the first quarter owing mostly to its struggling offshore and marine business. "But it's not just the numbers. Investors and analysts will be looking at Keppel's wordings on its engagement with clients, to detect signs of more contract delivery delays," Mr Teo said.
With crude oil benchmark Brent futures unable to hold the US$50- per-barrel level hit last month, the offshore and energy industries are not set for a quick recovery. For Keppel, pipeline growth remains elusive, and it announced no new major contracts until this month when it won four worth some $120 million.
Still, Keppel Corp shares closed on Friday at $5.62, up 4.9 per cent over the past month, tracing the market's post-Brexit surge and a 5.9 per cent gain to the benchmark Straits Times Index in the same period.
The STI also closed 2.75 per cent higher last week, pushed up by buoyant mood around the record smashing run on Wall Street.
Between the push of the US markets' confidence and the pull of choppy earnings at home, SMRT may be the standout counter this week as investors cheer the new rail financing framework (NRFF).
With the Government taking over the rail assets and SMRT operating on an asset-light, licence-based model from Oct 1, the operator can look forward to earning stability and much more manageable costs.
Expenditure for repairs and maintenance - that shot up 14.8 per cent to $139.87 million for the full year ended March 31 - will become less of a burden for the firm, which can then focus more on improving services and profitability, Mr Teo said.
SMRT shares last traded at $1.545 on Friday before trading was halted for the NRFF announcement. Its first quarter results will be out on July 28.
