SG Morning Highlights | Golden Agri expects to be profitable despite Q4 fair value loss

Advancers / Decliners is 79 to 55, with 167.80 million securities worth S$94.35 million changing hands.

Corporate earnings growth is expected to slow in the year ahead in many countries as higher inflation and rising interest rates take an even bigger toll and companies brace for the likelihood of a global economic downturn.

US companies are forecast to have the slowest full-year profit growth since 2020 and the start of the coronavirus pandemic. Some top equity strategists predict no profit growth or even a decline in earnings.

Investors have been watching estimates fall in recent months. S&P 500 fourth-quarter 2022 earnings now are expected to decline 1.1 per cent year on year, which would be the first quarterly earnings fall since the third quarter of 2020, according to IBES data from Refinitiv as of Friday.

Economists say there is a 7-in-10 likelihood that the US economy will sink into a recession next year, slashing demand forecasts and trimming inflation projections in the wake of massive interest-rate hikes by the Federal Reserve.

The probability of a downturn in 2023 climbed from 65 per cent odds in November and is more than double what it was six months ago, according to the latest Bloomberg monthly survey of economists. The poll was conducted Dec 12-16, with 38 economists responding about the chance of a recession.

The median estimates see gross domestic product (GDP) averaging a paltry 0.3 per cent next year, including an annualised 0.7 per cent decline in the second quarter and flat readings in the first and third quarters. Consumer spending, which accounts for about two-thirds of GDP, is projected to barely grow in the middle half of the year.

Malaysia's Prime Minister Anwar Ibrahim on Tuesday (Dec 20) said the country's gross domestic product this year was very likely to exceed earlier projections of between 6.5 per cent and 7 per cent.

"This year's economic performance is encouraging as a result of the reopening of the economy in line with a shift to a Covid-19 endemic phase," Anwar, who is also finance minister, said in Parliament.

Malaysia's economy has bounced back rapidly from the pandemic after an easing of restrictions in April, but there are concerns that a slowdown in the world economy could hurt export growth going forward.

Real estate investment volumes will continue to contract by 5 to 10 per cent in 2023 after declining 25 per cent year on year. This forecast is due to "tumultuous" economic and financing conditions weighing on sentiment, said JLL on Tuesday (Dec 20).

"Optimism driven by the idea of the pandemic coming to an end has slowly given way to caution amid concerns about inflation, interest rates and geopolitics," said JLL Asia-Pacific chief research officer Roddy Allan.

Certain segments, however, will continue to see investor interest. The real estate firm expects capital flows into hotels and hospitality assets to rise 6 per cent in 2023, tracking a 10 to 15 per cent increase in 2022 amid border reopenings.

The transaction was made by a collective sale by way of public tender, the hotel operator said in a bourse filing.

Ming Arcade was sold to Royal Group of Companies – a Singapore-based family office controlled by billionaire Asok Kumar Hiranandani – for S$172 million by a public tender exercise. The property investment and development company intends to redevelop its newly-purchased site.

The mainboard-listed company said in a profit guidance on Tuesday (Dec 20) that the fair value loss was a result of changes in the fair value of its investments in Q4. Nevertheless, the resulting fair value of the financial asset is still "well above its investment cost", it noted.

In addition, the group recorded a net profit of US$675 million for the nine months ended Sep 30, suggesting that its business model "remains intact and resilient", it said.

The hackers had sent an email to the electric carmaker demanding US$2.25 million worth of bitcoin and claiming that they had its internal data, according to media reports.

The company said it was working with government authorities to investigate the data breach.