SG Morning Highlights: Singapore secured S$6.3b in fixed asset investment commitments in Q2

Advancers / Decliners is 159 to 43, with 160.64 million securities worth S$121.45 million changing hands.

Investment commitments secured for Singapore in the second quarter of 2022 amounted to S$6.3 billion in fixed asset investment (FAI) and S$2.1 billion in total business expenditure (TBE), according to the latest Economic Survey of Singapore released on Thursday (Aug 11) morning.

The figures refer to investment commitments garnered by the Singapore Economic Development Board. When these projects are fully implemented, they are expected to generate S$6.1 billion of value-added and create more than 5,100 jobs in the coming years.

Manufacturing investments accounted for the largest share of FAI, at S$3.6 billion or 45.7 per cent of the total. Of this, the electronics and biomedical manufacturing clusters accounted for the largest amount of commitments, at S$2.9 billion and S$430 million respectively.

Traders slashed bets the Federal Reserve will deliver a third straight 75-basis-point interest rate increase in September after data released Wednesday (Aug 10) showed US inflation slowed last month.

Consumer prices didn't rise at all in July compared with June, a US Labor Department report showed, marking the slowest monthly inflation in more than two years as fuel prices dropped.

Traders of futures tied to the Fed's policy rate sent the contracts soaring. Prices after the report show traders now expect the Fed to raise rates by 50 basis points next month, not the 75 basis points priced in before the CPI report.

The Fed's current policy rate target is now 2.25 per cent-2.5 per cent.

Physical oil prices around the world have begun to sag alongside futures, reflecting less alarm over Russian-led supply disruptions along with heightened worries about a possible global economic slowdown.

Lower-than-usual US petrol demand during peak summer driving season and contracting factory activity in China indicate that high prices cut consumption in the world's top oil consumers, analysts and traders said. That is a stark contrast from last month when physical market activity suggested buyers were more worried about securing supplies.

The group's half-year earnings per share also fell 66.4 per cent to S$0.084 from S$0.25 previously, despite a 29.1 per cent gain in revenue to S$1.35 billion from S$1.05 billion in H1 2021 — boosted by higher contributions from its fee income-related business (FRB) and real estate investment business (REIB).

The rise in revenue was driven mainly by the strong recovery of the group's lodging operations, post-relaxation of travel restrictions across most countries, said CLI.

This was mainly due to divestment gains from the sale of Millennium Hilton Seoul, as well as the gain from the group's deconsolidation of CDL Hospitality Trusts (CDLHT), which resulted from the distribution in specie of CDLHT units in May 2022.

The S$1.1 billion net profit was the highest net profit achieved since CDL's inception in 1963, it said in a press statement. The results translate to earnings per share of S$1.235, against a loss per share of S$0.042 in the corresponding period a year ago.

The increase was partially due to higher marked-to-market, fair-value gains on investments designated at fair value through profit or loss.

"Other gains", which included these fair-value gains, jumped to S$40.1 million in H1, from S$8.1 million in the year-ago period.

The decline was attributed to a jump in tax expense for H1 to S$8.1 million, from S$1.1 million a year ago.

The increase in tax paid was largely due to higher profits in H1, as well as the exemption of tax in the corresponding period last year as a result of the Job Support Scheme.

For the 6 months to June 2022, the manufacturer of the Tiger Balm line of products delivered a 45.8 per cent year-on-year jump in net profit from S$53 million in the previous corresponding period.

Earnings per share improved to S$0.349 from S$0.239. Revenue in the period rose 45.1 per cent, from S$65.8 million to S$95.5 million.