SG Morning Highlights | Shangri-La Asia Reports A Sharp 283.1% Decline in Net Profit for First Half-Year due to Escalating Operating Costs

Advancers / Decliners is 178 to 46, with 203.75 million securities worth S$163.88 million changing hands.

A report by GlobalData reveals a 23.7% drop in Singapore's mergers and acquisitions (M&A) volume, reflecting a broader trend of reduced deal-making across the Asia Pacific region, which saw a 9.9% overall decline. Significant year-over-year decreases were recorded in several APAC countries from January to July 2024, including China, Australia, South Korea, Malaysia, Hong Kong, and Indonesia. In contrast, India, Japan, and Thailand reported gains in deal volume. The Asia Pacific region fared better than others, with North America, Europe, the Middle East and Africa, and South and Central America experiencing sharper declines. Aurojyoti Bose of GlobalData notes that while most APAC markets saw reduced deal volumes, the overall impact was mitigated by the growth in select markets.

Singapore's food and beverage (F&B) industry is facing a profitability crunch as the number of new establishments has outstripped the growth of the customer base, consisting of tourists and locals. Despite an increase in the number of F&B businesses since 2014, the industry has not seen a corresponding rise in tourist arrivals or local population growth post-COVID. Tourism receipts in Q4 2023 were still 2% lower than in Q4 2019, and tourist numbers in Q2 2024 remained below 2019 levels. Inflation has driven up F&B spending by tourists, but this does not reflect a real increase in consumption.

Analysts from Savills Research & Consultancy highlight the squeezed profit margins for F&B operators and suggest that the retail and F&B trades haven't returned to pre-pandemic normalcy. They advise new entrants to conduct thorough due diligence, including understanding foot traffic and market competition, assessing sustainability, calculating staffing and break-even costs, and leveraging technology and online platforms to bolster their business.