The Dow Jones surged above the 22,000 mark for the first time yesterday, thanks to Apple’s strong earnings and robust performance overnight. Apple’s share price soared 4.73% after the earnings release. 

The Nasdaq and S&P 500 indices, on the other hand, were much more muted. Investors are trying to strike the right balance between pricing in favourable earnings results and decade-high valuations. 

Separately, the US dollar depreciated over 3% against its major peers in the second quarter, inflating MNCs’ overseas revenue and profits when they are translated back to dollar. This effect has fuelled – and will continue to fuel – the rally of big US companies with multi-region operations. 

Tonight, forex traders will be sat in front of their screens in anticipation ahead of the Bank of England’s interest rate decision. Although the market only sees an 8.5% likelihood of a rate hike tonight, the BoE’s tone of future policy outlook will bring significant impact to sterling pairs. 

The inflation rate in July fell to 2.6% from 2.9%, resulting in less inflationary pressure to push for rate hikes. Meanwhile, the slowdown in the UK economy’s growth and tapered consumption are factors supporting a lack of change in interest rate policy. In addition, the ongoing Brexit negotiations with EU counterparts and potential uncertainties are further factors which the BoE will consider to maintain the doves. 

Singapore earnings highlight:

Genting Singapore (Q2):

  • Overall: beat estimates
  • Q2 net profit jumped to S$172.7 million from S$18.8 million a year ago, translating into 918% year-on-year (YOY) growth
  • Revenue up 24% YOY, whereas sales cost reduced
  • Earnings Per Share (EPS) S$0.0119, higher than forecast of S$0.007

StarHub (H1):

  • Overall: flat
  • Revenue dropped 2% YOY to S$1,080 million due to lower mobile, broadband and pay TV services in the first half of the year
  • Earnings Per Share (EPS) S$0.05, higher than forecast of S$0.043
  • EBITDA dropped 9% to S$341 million
  • EBITDA margin was lower at 31.6% versus 34.2% a year ago
  • Free cash flow dropped 42% or S$133 million whereas cash CAPEX surged 64% at S$148 million YOY
  • Outlook for FY2017 revenue to be at about 2016’s levels

CapitaLand (Q2)

  • Overall: beat estimates
  • Net profit surged 97% YOY to S$579.3 million, mainly due to higher revaluation gains from investment properties and divestment projects
  • Revenue dropped 12.3% due to lower contribution from development projects in Singapore

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