SG Morning Call | Singapore Stocks Open Lower on Monday; UOB Sinks 2%; DBS and OCBC Drops 1%

Market Snapshot

Singapore stocks opened lower on Monday. STI fell 1.3%; Singtel fell 2.7%; Sats fell 2.4%; Genting Singapor fell 2%; Sembcorp Industries and UOB fell 1.8%; DBS fell 1.3%; OCBC fell 1.1%; Keppel fell 1%.

Stocks to Watch

$Sembcorp Industries(U96.SI)$: The energy and urban development company has inked a share purchase agreement with CleanCurrent Renewable Energy in the Philippines to acquire Puente Al Sol. This marks its entry into the country’s renewable energy market. The proposed acquisition, with a total consideration of S$105 million, will be funded via Sembcorp’s internal cash and borrowings, said the group on Friday. It is not expected to have a material impact on Sembcorp’s earnings per share or net tangible assets per share for the financial year ending Dec 31, 2025. Shares of Sembcorp closed 2.8 per cent or S$0.15 higher at S$5.58 on Friday.

$Sats(S58.SI)$: It acquired the remaining 15 per cent stake in its Thai unit Sats Food Solutions (Thailand) (SFST) from Bangkok Ranch for about S$3.4 million. The transaction gives Sats total ownership of SFST and will deepen its strategic partnership with Japanese trading house Mitsui, which will take a 15 per cent stake in SFST, said the company on Friday. It is not expected to have a material impact on Sats’ net tangible assets per share or consolidated earnings per share for the current financial year ending Mar 31. Shares of Sats closed 0.3 per cent or S$0.01 lower at S$3.39 on Friday.

$CapitaLand Ascott Trust(HMN.SI)$ (Clas): It acquired two freehold limited-service hotels in Japan for 21 billion yen (S$178.5 million). The chief executive of its managers Serena Teo said that the deal – which is priced at an 8.3 per cent discount to independent valuation – is part of its portfolio reconstitution strategy to enhance its portfolio quality and deliver stable returns to its stapled securityholders. Stapled securities of Clas ended flat at S$0.895 on Friday.

$Raffles Medical(BSL.SI)$: Two veteran bankers have been designated to the board of Raffles Health Insurance, the insurance unit of Raffles Medical, as non-executive and independent directors with effect from Feb 1. With their “vast experience” in banking and finance, former UOB managing director of group credit for commercial banking and structure trade Eric Tham and seasoned investment banker Tan Jeh Wuan will be able to contribute positively to the business, said Raffles Medical Group executive chairman Loo Choon Yong. Shares of Raffles Medical closed S$0.005 or 0.6 per cent higher on Friday at S$0.835. 

$Interra Resource(5GI.SI)$: Interra Resources called for a trading halt on Monday morning pending the release of an announcement. Shares of the company, which engages in petroleum exploration and production activities, closed 5.3 per cent or S$0.002 lower at S$0.036 on Friday.

SG Local News

Singapore’s Operating Revenue on Track to Exceed Full-Year Estimate, Allowing "Generous" Budget 2025: Economists

After the first nine months of Singapore’s fiscal year, the government’s operating revenue is on track to meet – and likely surpass – the full-year estimate, said economists.

This could mean a larger-than-expected surplus for the 2024 fiscal year, allowing Budget 2025 to be more generous, they added.

OCBC chief economist Selena Ling expects a “bumper” FY2024 surplus that provides “ample room” for a “generous and impactful” Budget 2025, which comes both in an election year and amid SG60 celebrations.

Singapore-Based Office S-Reits Report Stronger Operational Performance

According to data from JLL, leasing activities in quality office developments in Singapore improved in the fourth quarter of 2024. Rental and capital values are expected to stay stable in the first half of 2025, and recover in the latter half of the year.

CBRE predicts a modest rise in Core Central Business District Grade A rents in 2025 due to tentative demand, limited supply, and continued flight to quality.

We preview this earnings season as four of six Singapore-listed real estate investment trusts (S-Reits) with exposure to Singapore-based offices have reported their results.

Singapore Will Continue to Work with US Counterparts to Comply with Export Controls: MTI

The Ministry of Trade and Industry (MTI) said on Saturday (Feb 1) that Singapore’s customs and law enforcement agencies will continue to work closely with US counterparts on export controls.

This comes as questions were raised over whether DeepSeek gained access through Singapore intermediaries to Nvidia chips that were subject to export controls.

In a statement on Saturday, MTI said it expects US companies, such as Nvidia, to comply with US export controls and local domestic legislation.

Sembcorp to Miss 2025 Target on Green Business Profits, Drops Metric from 2028 Strategy

Sembcorp Industries will miss one of its 2025 strategic targets of having 70 per cent of its net profit come from its sustainable solutions business, said the energy company in response to queries from The Business Times.

This means that Sembcorp’s management will not be able to receive the compensation tied to this particular sustainability goal.

It is one out of three energy transition targets Sembcorp had set in 2021, as part of its pivot to be a renewable energy company, with the executives’ remuneration directly linked to the achievement of all three targets.