Singapore Monthly Wrap - 12 consecutive months of CPI deflation


Market drivers:
FSSTI shed its October gains and declined by 4.8% in November, to close at 2,856. Singapore underperformed Asia-ex Japan (US$ terms) by 2.9% over the month. The SGD depreciated by 0.7% m/m and closed at 1.41/$. All sectors delivered negative returns, with Consumer Staples returning to its laggard position (-8.3%) in November, from the highest returns in October, on a pull back in Agri names WIL (-8.6%) and GGR (-7.7%).

Economic review:
Singapore’s economy expanded 1.9%q/q saar in 3Q compared to the 0.1% rise estimated in the initial GDP release, owing to upward revisions in service sector growth, partially offset by deeper contractions in both the manufacturing and construction sectors. Industrial production rose 2.5%m/m sa in October, leaving output at -5.4%oya. CPI fell 0.4%m/m, sa in October, leaving headline inflation at -0.8%oya. October non-oil domestic exports (NODX) rose 1.2%m/m sa in USD terms. Retail sales volumes fell 4.0%m/m sa in September following a strong August rise of 6.1%m/m, due in part to sales during Singapore’s 50th year of independence (SG50) celebrations.

Company news:
(1) Oct-15 home sales surged 60% MoM (-30% YoY) off the year-low of 341 units in Sep-15 to 546 units. Including ECs, volumes were up 31% MoM (-6% YoY) to 822 units.

(2) Malaysia’s Oct-15 palm oil inventory rose 7% M/M and 31% Y/Y to an all-time high of 2.83MM MT. Oct-15 production rose 8%Y/Y (+4% M/M), outpacing exports/demand at +6%Y/Y (+2% M/M).

(3) Singapore Airlines and Tigerair issued a joint announcement on November 6, whereby SIA launched a voluntary conditional general offer for all the shares of TGR that it does not own and to delist and privatize TGR.

(4) SIE signed an agreement with Rolls-Royce Overseas Holdings (RROH) and HAECO to divest its 10% stake in HAESL to each party.

(5) The BDI fell w/w, driven by weaker rates across all vessel segments. The SCFI fell 11% w/w for the week ending Nov 20. (6) Results reported for STE, SIA, YZJSGP, SIE, CIT, UOL, FCL, CAPL, DBS, FR, GGR, WIL, ST and STH. (Read Report)

Source : JP Morgan Asia Pacific Equity Research

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