SG Morning Highlights: Singapore core inflation climbs to 5.3% in September; headline inflation steady at 7.5%

Advancers / Decliners is 112 to 36, with 72.72 million securities worth S$108.27 million changing hands.

The global economy is approaching a recession as economists polled by Reuters once again cut growth forecasts for key economies while central banks keep raising interest rates to bring down persistently-high inflation.

One bright spot is that most major economies already in a recession or heading into one are starting with relatively low unemployment compared with previous downturns.

Indeed the latest poll expects the smallest gap between growth rates and joblessness in at least four decades.

There were 2,994 new Covid-19 infections on Tuesday (Oct 25), the lowest figure on a Tuesday in October.

The lower number of cases, which is atypical of a Tuesday, could be due to Deepavali on Monday, as people put off going to the doctor until after the long weekend, said infectious diseases experts.

Professor Paul Tambyah, president of the Asia Pacific Society of Clinical Microbiology and Infection, expects Wednesday's case figure to be in the 11,000 to 12,000 range, similar to the last two Tuesdays.

Singapore's core inflation rose further to 5.3 per cent in September but headline inflation held steady at 7.5 per cent, according to Department of Statistics consumer price index (CPI) data on Tuesday (Oct 25). Both readings were in line with economists' expectations.

The pickup in core inflation was due to larger price increases for items such as food, services and retail and other goods. But headline inflation - which includes accommodation and private transport costs – remained the same as higher core and accommodation inflation were offset by lower private transport inflation.

The Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) maintained their full-year expectations for headline inflation at 6 per cent and core inflation at 4 per cent.

Top Wall Street bankers offered up a litany of warnings that recession in the US and Europe is increasingly likely, with geopolitical risks further darkening the horizon into 2023.

Economic conditions are going to "tighten meaningfully from here," Goldman Sachs Group chief executive officer David Solomon said at Saudi Arabia's Future Investment Initiative conference in Riyadh.

The Fed has made it clear they're going to raise the path target of 4.5 per cent to 4.75 per cent and then pause given there's a lag effect, he said. But if they don't see real changes in behaviour – labour is still very, very tight, for example, "my guess is they'll go further."

US consumer confidence ebbed in October after two straight monthly increases amid rising concerns about inflation and a possible recession next year, a survey showed on Tuesday (Oct 25).

The Conference Board said its consumer confidence index fell to 102.5 this month from 107.8 in September. Economists polled by Reuters had forecast the index at 106.5.

Consumers' 12-month inflation expectations rose to 7.0 per cent from 6.8 per cent last month. The survey's present situation index, based on consumers' assessment of current business and labour market conditions, declined sharply to 138.9 from 150.2 in September.

Singapore's energy regulator will introduce major guardrails to ensure secure and sufficient gas supply and power generation, and to better protect consumers.

The move comes after extraordinary spikes in spot electricity prices last year and a global energy crunch that rocked the electricity market.

Measures targeted at electricity retailers include stricter qualifying criteria such as higher capital and hedging requirements to ensure their resilience against market volatility. There will be additional protection for consumers if retailers prematurely terminate contracts, the Ministry of Trade and Industry (MTI) said on Tuesday (Oct 25).

In a notice filed on the Singapore Exchange on Tuesday (Oct 25), SIA said that payout will be made to bondholders on Dec 8, 2022.

For bondholders, the yield-to-call works out to 4 per cent a year.

The vessels will be equipped with GTT (Gaztransport & Technigaz) Mark III Flex membrane tanks and are scheduled to be delivered between 2025 and 2026.

In a press statement on Wednesday (Oct 26), the group said this marks its first GTT Mark III LNG carrier order after it obtained its GTT licence in early September this year.

The increase was mainly driven by the acquisition of Keppel Bay Tower in May 2021 and adjustments of income tax expense for previous years. This was partially offset by the divestment of 275 George Street in Brisbane in July 2021 and lower contribution from 8 Chifley Square, said Keppel Reit in a bourse filing on Tuesday (Oct 25).

To celebrate the Reit's 20th anniversary in 2026, Tan Swee Yiow, chairman of Keppel Reit's manager, announced that it will distribute an additional S$100 million out of its accumulated capital gains over the next five years, as a reward for unit holders.

Gross revenue for the quarter however, gained 15.7 per cent to S$107.3 million, up from S$92.7 million a year ago, while net property income also grew 12.1 per cent to S$77.1 million from S$68.8 million in Q3 2021.

This comes on the back of stronger operational performance in occupancy and rent across all its office, retail and convention properties, though these earnings were hampered by higher interest rate and exchange rate pressures.

In a business update on Wednesday (Oct 26), its manager attributed the higher year-on-year gross revenue and NPI to contributions from Ara Logos Logistics Trust (ALog Trust) after the merger in April 2022.

The latest set of results brings ESR-Logos Reit’s gross revenue for the year to date (YTD) to S$243.9 million, up 34.8 per cent from S$180.9 million the previous year. YTD NPI rose 32 per cent to S$172.7 million from S$130.8 per cent a year ago.