An unexpected plan by Elon Musk to take Tesla Motors private led to a 11 percent jump in its share prices, which closed at US$379.5 last night.
This values the company at $64.4 billion by market cap, 10% away from Elon Musk’s claimed price of $71.2 billion if share price climbed to $420. The rationale behind is to create ideal operating environment for Tesla, with wild swings of stock price becoming a major distraction for employees, who are also shareholders.
Singapore’s Straits Times Index opened 10 points lower due to disappointing earnings of SingTel – the largest Telco player in Southeast Asia. SingTel’s first-quarter net profit fell 6.6% yoy due to intensified competition in the Indian and Indonesia market, as well as adverse currency movements. Underlying profit excluding exceptional items tumbled 19 percent to S$733 million. Its share price traded one percent lower.
Yesterday, the Straits Times Index soared over 54 points, or 1.6% backed by strong performance from the banking sector, with OCBC, UOB and DBS jumping 4.06%, 3.28% and 1.48% respectively. SingTel gained 0.95% ahead of earnings that is scheduled to be released today. Property developers including City Development, CapitaLand, UOL and Keppel Corp were also among the top gainers as market embraces a 'relief rebound' after their share prices was punished by recent property cooling measures.
In North Asia, Shanghai Composite rebounded 2.7% yesterday with trading volume remained on par with its 10-day moving average, a signal that this might be a technical rebound as volume did not match up with price movement. Sector wise, industrial and construction were among the top gainers following positive news over increasing infrastructural investment.
Likewise, Hang Seng Index jumped 1.54% to 28,248 points, breaking out an immediate resistance level at 28,000. The future direction, however, is largely dependent on A-share sentiment as well as upcoming earnings season.
Today, market participants will focus on China July trade balance data due release at 10 am Singapore time. Higher-than-expected readings will likely provide support to the yuan, which has already depreciated over 5 percent over the last two months due to trade concerns as well as PBoC's easing stance. A big miss, however, will likely result in the opposite and further dampen market confidence.
By Margaret Yang in Singapore
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