Top Stock Market Highlights of the Week: Singapore’s Inflation, Alibaba’s Logistics IPO, City Developments Limited and Grab Holdings

Welcome to this week’s edition of top stock market highlights.

Singapore’s core inflation

There is more good news on the inflation front as consumer prices continue to decline.

Core inflation fell to 3.4% for August and it was the fourth straight month of decline.

July’s core inflation came in at 3.8% while June’s rate was at 4.2%.

Economists, however, estimate that inflation may rebound if oil prices stay high and bad weather results in higher food prices.

Oil prices have increased to their highest level this year, with Brent Crude futures breaching the US$97 mark.

Headline inflation also slid to the 4% level for August, down slightly from 4.1% in July.

Both the central bank and the Ministry for Trade and Industry (MTI) have maintained their forecasts for overall inflation for this year to end between 4.5% and 5.5%.

Core inflation is projected to fall in the range of 3.5% to 4.5%.

Alibaba (NYSE: BABA)

The logistics arm of Alibaba Holdings has been given the green light to list by the Hong Kong Stock Exchange.

Cainiao Smart Logistics Network was co-founded by the e-commerce company back in 2013 as a delivery network for its Chinese online marketplaces.

Cainiao earns around 30% of its revenue from Alibaba with its average parcel volume increasing from 0.7 million in 2017 to 4.8 million in 2023.

Revenue for the quarter ending 30 June 2023 jumped 34% year on year to RMB 23.2 billion with a net profit of RMB 391 million.

Should the IPO go through, Cainiao could raise US$1 billion or more but Alibaba intends to retain more than a 50% stake in it.

Assuming this listing is successful, it could pave the way for Alibaba to spin off more of its units in a move to split up its business.

Its grocery chain business, Freshippo, was slated for a listing but the plug was pulled because of weak sentiment for consumer stocks.

The overhaul will see Alibaba split into six units under newly-appointed CEO Eddie Wu.

City Developments Limited (SGX: C09)

City Developments Limited, or CDL, is investing in 25 high-quality freehold residential properties in Japan for JPY 35 billion (around S$321.9 million).

These properties contain a total of 836 units and are CDL’s largest transaction in the private rented sector (PRS) space.

This portfolio of assets is located in Tokyo and has an average age of less than two years.

It is also the property giant’s first PRS purchase in Tokyo after similar moves in Osaka and Yokohama.

The location of these properties is very good and conveniently located within 10 minutes from a train station, allowing them to enjoy a committed occupancy rate of around 97% and stable rental income.

Following this transaction, CDL will triple its assets to 38 totalling more than 2,100 units with an asset value of around S$644 million.

CEO Sherman Kwek believes that the purchase will help the group expand further into the global living sector while enhancing its recurring rental income.

Grab Holdings (NASDAQ: GRAB)

Grab is discontinuing its retail investment product and services business for GrabInvest after a review found that the unit will not be commercially viable.

The superapp is stopping both of its investment products, AutoInvest and Earn+, and will not be taking in new deposits.

Customers are being notified by email and have until 13 October to withdraw money from these products.

AutoInvest was GrabInvest’s first investment product where the money went into the money market and short-term fixed income mutual funds.

Investments could go as low as S$1 and the product offered returns of up to 1.18% per annum.

Earn+ was Grab’s second investment product introduced back in May 2022 whereby cash was invested in institutional funds to earn a better return of between 2% to 2.5%.

This move follows MoneyOwl’s shock closure last month where the financial advisory firm announced that it will transfer all client accounts over to its custodian iFAST Corporation Limited (SGX: AIY).

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Disclosure: Royston Yang owns shares of iFAST Corporation.

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