Top Stock Highlights of the Week: NASDAQ’s Big Decline, Yahoo and Citibank Partnership and Frasers Hospitality Trust’s Privatisation

NASDAQ’s Big Decline

The NASDAQ Composite Index took a sharp tumble on Tuesday, falling 5.2% to 11,633.57.

Year to date, the bellwether technology stock index is down 27%.

There was bad news again for the US economy as fresh inflation data showed that price gains did not moderate as much as expected.

Overall inflation rose 8.3% in August even though petrol prices came down.

Core inflation, which strips out food and fuel prices, climbed 6.3% in August, higher than the 5.9% recorded in July.

The data all but cements the Federal Reserve’s tough stance of hiking interest rates to bring inflation under control.

Officials are expected to make yet another 0.75 percentage point increase, making it a hat-trick of supersized moves.

With inflation still running high, investors need to see some signs of moderation for the Federal Reserve will slow down its pace of hikes.

Citibank and Yahoo partnership

Yahoo and Citibank, a unit of Citigroup Inc (NYSE: C), announced a collaboration to launch a dedicated personal finance portal.

Named “Life and Money”, it provides fresh perspectives on money to equip diverse audiences with the knowledge and tools to better manage their financial journey.

The site will feature a curated selection of original content from Citibank and also relevant aggregated content from Yahoo.

Various multimedia formats such as articles, videos and podcasts will be used to deliver this content.

This hub will cover wide-ranging topics centred around personal finance and lifestyle such as saving, investing, achieving work-life balance, parenting, and other pertinent topics.

The site promisesto dispel misconceptions surrounding money, inspire new lifestyle habits, and provide recommendations for readers at different life stages.

Specific life stages include new graduates seeking financial independence, couples starting a new family, mid-career professionals wanting to better manage their money, and folk who are planning their retirement.

These finance-related tips and advice will go a long way in helping individuals, families and seniors to plan their finances and manage their wealth better.

Frasers Hospitality Trust (SGX: ACV)

Frasers Hospitality Trust, or FHT, saw its units plunge by 22.5% from S$0.71 to S$0.55 after a failed privatisation attempt by sponsor Frasers Property Limited (SGX: TQ5), or FPL.

The hospitality trust failed to garner the required 75% of votes needed from stapled security holders at a scheme meeting held on 12 September.

Only 74.88% of unitholders voted in favour of the resolution to take FHT private, narrowly missing the 75% mark.

The managers of FHT had proposed back on 13 June that the trust be taken private at S$0.70 per unit by FPL, which was a 7% premium to FHT’s net asset value at the time of announcement.

The reasons for the dissatisfaction may stem from the fact that an economic recovery is underway with borders reopening and air travel restarting.

Hospitality trusts, as a whole, have reported better operating numbers and improved distribution per unit.

Hence, unitholders may feel that FHT is worth much more than S$0.70 per unit and that privatisation will undervalue the trust.

Furthermore, those who dissented could also be relying on FHT for a steady source of dividend income.

By delisting FHT, these investors will lose out on a valuable source of income and also have to think of ways to redeploy the money received from the privatisation.

Disclaimer: Royston Yang does not own shares in any of the companies mentioned.

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