The Week Ahead: City Developments and UOL
We are almost done with the first-quarter reporting season. Only a handful of Straits Times Index (SGX: ^STI) stragglers remain to post numbers for the first three months of the year.
Golden Agri-Resources (SGX: E5H) said in November that it expects crude palm oil (CPO) prices to be supported by global demand growth. That should bode well for the farmer when it reports full-year numbers on Tuesday. In the third quarter, the company reported an 80% drop in third-quarter profit. That was due to deferred taxes from the previous quarter.
Property developer, UOL Group (SGX: U14), posted a 609% jump in third-quarter profits in November. This was due to some one-off accounting gains from acquisition and consolidation. The company sounded upbeat on the outlook for commercial property. It said Singapore office rents are expected to stabilise on the back of a more positive economic outlook.
Yangzijiang Shipbuilding (Holdings) (SGX: BS6) said in November that third-quarter earnings jumped 208%. The improvement was partly helped by its share in results of associated companies. The company said market conditions for the shipbuilding industry have continued to improve with the Baltic Dry Index recovering to a three-year high.
Net profit at City Developments (SGX: C09) fell 8% in the third quarter. The developer said the drop was due to the absence of one-off gains from projects completed in the preceding year. Excluding this and other exceptional items, earnings increased by 3.5%.
Jardine Cycle & Carriage (SGX: C07) said in November that the outlook for the rest of the year is expected to remain positive. In the third quarter, the conglomerate posted a 13% jump in third-quarter net profit, thanks to its main profit contributor, Astra International.
On the economic front, the new chair of the Federal Reserve, Jerome Powell, will testify before the House of Representatives’ Financial Services Committee on 27 February. He will flesh out the Central bank’s semi-annual report on monetary policy and the economy. The market should get some idea as to whether the US will hike interest rates three or four times the year.
On the economic front, China will report those closely-watched Purchasing Managers’ Indices for February. Provided the numbers come in above 50, then investors should be reasonably satisfied.
Japan will announce unemployment numbers for January. In December, the unemployment rate hit a 24-year low, as strong economic growth led to a shortage of labour. This could put the Bank of Japan in a difficult position about continued stimulus to support the economy.
The Eurozone will also announce unemployment figures. It stood at 8.7% in December. Despite the seemingly-high figure, it was the lowest jobless rate since 2009. It was also lower than the long -run average of 9.76%.
Finally, look out for those Singapore bank-lending numbers for January. In December, lending to businesses fell slightly, while consumer loans went up. The net result was a slight decrease but nothing much to worry about.