DBS punches above $46 to record high but SGX slides; Temasek units make bid for Paragon mall

SINGAPORE - Last week’s earnings announcements kicked off with DBS Group reporting $2.62 billion in net profits for the fourth quarter of 2024, bringing its full-year profit to a record $11.4 billion.

The 10 per cent year-on-year jump in the fourth quarter profit enabled Singapore’s largest bank to pay a final dividend of 60 cents per share, higher than the 54 cents paid in 2023, and taking the total dividend for 2024 to $2.22 per share, a 27 per cent increase.

Additionally, DBS said it will start paying in 2025 a capital return dividend of 15 cents per share per quarter, on top of the ordinary dividends it is already paying, as part of a three-year plan to reduce excess capital.

These announcements took the bank’s shares above $46 for the first time, to an all-time high of $46.38 on Feb 10, which, in turn, drove the Straits Times Index (STI) above 3,890 points, a record high, on Feb 11.

Several other companies reported their earnings over the past week.

Data centre real estate investment trust (Reit) Digital Core rose 5.66 per cent to 56 US cents, after it reported net profits attributable to unit holders of over US$205 million (S$274.7 million) for 2024. It declared a second-half distribution of 1.8 US cents, up 1.1 per cent year over year, bringing its full-year distribution to 3.6 US cents.  

The Reit said that while artificial intelligence (AI) is driving rapid growth in data centre demand, AI still represents a small portion of the overall market. It added that data centre supply for non-AI functions remains “severely constrained” in key global markets.

Digital wealth platform iFast closed the week up 5 per cent at $7.89, after reporting its net profit surging 135.7 per cent to a record high of $66.63 million in 2024, driven by higher fee income from its managed investments and its digital bank turning profitable for the first time.

iFast also set out its targets for the next five years: quadruple the amount of investments it manages for clients to $100 billion, grow the global clientele for its digital bank and develop the online pensions business.

Yoma Strategic shares jumped 25 per cent to close the week at 9.4 cents after releasing a business update for the October to December period. The Myanmar company said revenue from its real estate business rose to US$26.7 million for the period and now makes up around 54 per cent of the group’s total revenue, up from 37 per cent a year ago.

This was mostly due to three new development projects that are now being constructed in StarCity and Pun Hlaing, which contributed to revenue based on their completion percentage during the quarter, Yoma said.

It added that unrecognised revenue from all ongoing projects amounted to US$82.7 million as at Dec 31, 2024. This revenue is expected to be realised over the next 18 to 24 months as construction progresses.

Other market movers

Among the other movers on the Singapore Exchange (SGX) last week was Paragon Reit, which owns The Paragon mall in Orchard Road.

It jumped 11 per cent to 99 cents on Feb 10, after major shareholder Cuscaden Peak Investments – formerly Singapore Press Holdings – proposed to privatise and delist the Reit for 98 cents per share, or $2.78 billion in total.

Cuscaden Peak Investments is a subsidiary of Cuscaden Peak, an investment company jointly held by Mapletree Investments and CLA Real Estate. Both companies are backed by Temasek.

The offer comes ahead of major plans to renovate Paragon mall, which could involve a capital expenditure of between $300 million and $600 million.

Some analysts said the offer is an opportunity for unit holders to exit the Reit to avoid any potential disruptions to income ahead of renovations and recommended accepting the offer.

Should it go through, Paragon Reit could be the third counter to delist from the SGX in 2025. Two more companies, property developer SLB Development and agri-food business Japfa, may also be leaving the exchange after receiving privatisation offers from their major shareholders in January.

SGX slid 5.8 per cent on Feb 14, closing the week down 9 per cent at $12.69. SGX traded ex-dividend on Feb 13, meaning shareholders who purchased shares after this date are not entitled to receive the dividend payment of nine cents per share.

The bourse also erased its earlier gains after a review group set up by the Monetary Authority of Singapore (MAS) revealed its first proposed measures to revive trading on the exchange.

Announced after the market closed on Feb 13, the measures included tax incentives to attract more enterprises and fund managers to list in Singapore, and options aimed at helping local enterprises gain easier access to growth capital here.

Second Minister for Finance and MAS deputy chairman Chee Hong Tat also reiterated that the review group does not recommend requiring sovereign wealth fund GIC and the Central Provident Fund to invest in local stocks.

Market watchers were disappointed with the proposal, which came six months after the group was set up in August 2024. They noted that these initial measures do not address SGX’s fundamental problems, which include a lack of liquidity, unfavourable risk-reward ratios for investors, and inconsistent enforcement of some regulations, such as when and why some companies are queried versus others.

That prompted Citi analyst Tan Yong Hong to downgrade his 12-month share price target for the SGX by 9 per cent to $11.90 from $13.10 previously. He is expecting the optimism that drove a 25 per cent rally in the stock in the six months since the review group was formed to fizzle out.

Other stocks on the move last week included Seatrium, which announced on Feb 13 a second project with oil and gas giant BP to build a deepwater floating production unit (FPU). Its shares surged by almost 19 per cent during the week to close at $2.58.

ST Engineering hit an all-time high of $5 on Feb 14, after announcing on Feb 6 contracts worth $4.3 billion in the fourth quarter.

Meanwhile, financial services company Yangzijiang Financial rose more than 10 per cent during the week to close at 53 cents, a three-year high.

What to look out for this week

Prime Minister Lawrence Wong will 

deliver the Budget statement

 at 3.30pm on Feb 18. 

A slew of earnings announcements will follow throughout the week, with UOB announcing full-year results for 2024 on Feb 19. Genting Singapore and Wilmar International will report on Feb 20, followed by Seatrium on Feb 21. Singapore Airlines will release a business update for the third quarter of the 2024 financial year on Feb 20.

The MAS review group will also hold a press conference providing further details on its proposals on Feb 21.

Minutes of the Federal Open Market Committee will be released on Feb 20 by the Board of Governors of the Federal Reserve.

Markets could be volatile as investors look for clues regarding the interest rate outlook. On the one hand, Fed chair Jerome Powell has said there is no need to rush on interest rate cuts. On the other hand, US President Donald Trump’s tariff policies are expected to be inflationary.