SG Morning Highlights: Commodities face tough week as Fed angst builds

Advancers / Decliners is 29 to 116, with 50.29 million securities worth S$68.20 million changing hands.

As Singapore prepares to remove restrictions for those who are not fully vaccinated, it is also ready to step up such measures when necessary to lower infection rates and protect the unvaccinated, said Health Minister Ong Ye Kung on Sunday (Oct 9).

With vaccination-differentiated measures (VDS) to be fully lifted on Monday, he noted that while such restrictions – aimed at protecting the unvaccinated in crowded areas – had pushed many to get vaccinated, it is better to step them down given that they are now not as extensive.

Speaking to the media at a Sembawang Community Club event, the minister added: "Today VDS is very light, and in restaurants is pretty much an honesty system with random sporadic enforcement."

Commodities surged by more than 5 per cent last week after Opec+ agreed to chop oil supply but the coming days may be more challenging territory for raw materials. Escalating concerns about further Federal Reserve rate hikes, China's reopening after a week-long break, and potentially sobering commentary from IMF and World Bank annual meetings may all swing prices.

In energy, highlights include outlooks from the International Energy Agency (IEA) and Organisation of Petroleum Exporting Countries (Opec) as investors gauge prospects for demand, Europe's energy crisis, and the impact of sanctions on Russia flows. In crop markets, the US Department of Agriculture (USDA) lifts the veil on its vital Wasde snapshot. In addition, minutes from the Federal Reserve's September rate-setting meeting, due Wednesday (Oct 12), and US inflation data on Thursday, will shape the debate on interest rates, which may swing gold prices.

Below are some of the main items for investors to track this week, with attention also falling on what's next for China; key data from Asia on the world's most-consumed cooking oil; and struggles along the Mississippi River as water levels dwindle. Rounding it off is some seriously expensive petrol, with California prices on the cusp of a record.

There Is a global migration underway in the gold market, as western investors dump bullion while Asian buyers take advantage of a tumbling price to snap up cheap jewellery and bars.

Rising rates that make gold less attractive as an investment mean that large volumes of metal are being drawn out of vaults in financial centres such as New York and heading east to meet demand in Shanghai's gold market or Istanbul's Grand Bazaar.

But logistical issues combined with quirks of the market are making it difficult for traders to get enough bullion where they are wanted. As a result, gold and silver are selling at unusually large premiums over the global benchmark price in some Asian markets.

Singapore will soon be able to import live broiler chickens from across the Causeway as Malaysia is lifting its export ban from Oct 11.

The Singapore Food Agency (SFA) on Sunday (Oct 9) confirmed it received official notification from Malaysia's Department of Veterinary Services on the lifting of the ban which has been in place since Jun 1.

SFA said it welcomes the resumption of live broiler chicken imports, and is seeking clarification on the details.

The US dollar strengthened against major currencies on Friday (Oct 7) after US data showed employers hired more workers than expected in September, suggesting the Federal Reserve will likely stick to its aggressive tightening policy for now.

The dollar reversed early losses against the Japanese yen and was last up 0.2 per cent at 145.42 yen. The dollar hit a 24-year peak of 145.90 yen last month, which had prompted an intervention by Japanese authorities to shore up the fragile yen.

The euro fell against the dollar, extending losses after the US jobs report, and was last down 0.6 per cent at US$0.9735.

The conventional wisdom with stock bulls is that prices will take off when the Federal Reserve wins its fight against inflation. But the end of surging consumer costs could unleash another round of bad news.

A small chorus of researchers has for months warned of a potential hazard to earnings should the campaign to tamp down inflation succeed. Specifically, the squeeze on margins that could occur should an indicator known as corporate operating leverage suffer in an environment where sales flatten out.

The indicator is a measure of the difference between a company's fixed and variable costs. It can turn negative in the wake of peak inflation when some of a company's costs remain high but isn't able to offset them by raising prices because demand has faltered.

Indonesia plans to begin subsidising purchases of electric vehicles (EVs) next year as the country aspires to have 2.5 million EV users by 2025 to boost demand and reduce air pollution.

The government is deciding on the magnitude and its precise mechanism, said Transport Minister Budi Karya Sumadi in an interview on Thursday (Oct 6), promising that the new rule will become a "game changer" for the domestic industry.

"Someone asked me why is Indonesia so ambitious with EVs," said Sumadi. "Maybe because he doesn't experience the same thing as we do here in terms of air pollution coming from combustion engines."

The leak has potentially affected fewer than 20 of Dialog's customers and 1,000 current Dialog employees as well as former employees.

According to Singtel, there is no evidence that this attack is linked to the other attack experienced by Optus.

"On Saturday 10 Sept, we detected unauthorised access on our servers, which were then shut down as a preventative measure. Within two business days, our servers were restored and fully operational," reads the statement released by Dialog on Oct 10.

As previously announced, the real estate investment trust (Reit) is changing its financial year end from Aug 31 to Dec 31, resulting in a 16-month FY2022. Distributions for the four months ending December will be declared in February 2023.

Gross revenue for 12M FY2022 came in 1.7 per cent higher at S$281.9 million, while net property income (NPI) grew 3.5 per cent to S$209.7 million. The portfolio occupancy rate stood at 97.5 per cent.

As the deal entails a sale of over 20 per cent of the group's total net asset value, it is therefore a major transaction. Aspen would need the approval of its shareholders to go ahead with it.

Aspen noted that the proposed disposal could book a gain of about RM14.9 million; if the sale goes through, it could bring the net tangible asset value per share of the company to 39.22 sen from 37.84 sen, on a pro forma basis.