Top Stock Market Highlights of the Week: Singapore’s Fibre Network, Elite Commercial REIT and Nvidia

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

Singapore’s fibre network

Fretting that your internet speeds are too slow?

That may be a thing of the past.

The Infocomm Media Development Authority, or IMDA, has pledged to invest up to S$100 million to upgrade the country’s nationwide broadband network (NBN) by 2028.

When completed, the NBN will run at higher speeds of up to 10 gigabits per second (Gbps).

This investment will also support both the upgrading of front-end user equipment as well as the back-end network from the middle of 2024 to 2026.

In line with the rollout of 5G mobile services and faster Wi-Fi connections, the upgrading of the NBN will provide more seamless connectivity and enable Singapore to remain globally competitive, according to IMDA.

Companies that stand to benefit include NetLink NBN Trust (SGX: CJLU), which owns and operates the passive fibre network of Singapore’s NBN.

Telecommunication companies Singtel (SGX: Z74) and StarHub (SGX: CC3) should also benefit as more people utilise the faster networks to access mobile, broadband services.

Elite Commercial REIT (SGX: OXMU)

Elite Commercial REIT has released its second half of 2023 (2H 2023) and full-year results.

The UK commercial REIT saw revenue inch up 1.5% year on year to £37.6 million while net property income jumped 15.7% year on year to £41.4 million.

The better revenue was achieved mainly due to rental escalations of 13.1% for 136 properties linked to an inflation-related rental uplift back in April 2023.

Distribution per unit (DPU), however, tumbled by 28.9% year on year to £0.0342.

The fall was attributed to higher borrowing costs along with asset holding costs.

The REIT’s net gearing ratio ended the year at 47.5% but is set to fall to 40.9% following the successful completion of its first preferential offer which raised £28 million.

Borrowing costs should also fall to 5.1% from 5.3% three months ago with 66% of Elite Commercial REIT’s loans pegged to fixed rates.

The equity fundraising has not just lowered the REIT’s gearing but also increased its debt headroom for acquisitions from £40 million to £55.9 million.

Elite Commercial REIT enjoyed a high portfolio occupancy rate of 92.3% as of 31 December 2023.

The REIT manager will engage in proactive tenant management by focusing on tenant retention.

To do so, the manager will communicate with various UK government agencies to understand their needs and requirements.

The UK REIT will also negotiate to diversify its lease expiries.

The manager also has an asset repositioning strategy where vacant assets may be re-let, repositioned, or recycled.

Various alternative uses will be considered for an asset depending on real estate market conditions and the economic dynamics of the market.

Nvidia (NASDAQ: NVDA)

Nvidia has done it again.

The graphics processing unit (GPU) manufacturing specialist reported a stunning set of financial numbers for the fourth quarter of fiscal 2024 (4Q FY2024) ending 28 January 2024.

Its share price has galloped up 16.4% on the release of this news to close at a new all-time high of US$785.38, giving the company a market capitalisation of US$1.9 trillion.

For 4Q FY2024, Nvidia reported revenue of US$22.1 billion, up more than three-fold year on year and at a record high.

The main drivers of revenue were from its data centre and professional visualisation divisions, which recorded revenue increases of 409% and 105% year-on-year, respectively.

Its gross margin improved further by 12.7 percentage points to 76%.

Net profit soared more than eight-fold year on year from US$1.4 billion to US$12.3 billion.

A quarterly cash dividend of US$0.04 was declared and will be paid out in late March.

For the full fiscal year (FY2024), revenue more than doubled year on year to US$60.9 billion while net profit shot up more than six-fold year on year to US$29.8 billion.

The GPU manufacturer saw its free cash flow catapult from just US$3.8 billion in FY2023 to US$27 billion in FY2024.

For the first quarter of fiscal 2025, Nvidia expects its revenue to come in at US$24 billion, plus or minus 2%.

At this level of revenue, it will be nearly triple the US$8.3 billion of revenue that the company registered in the first quarter of fiscal 2024.

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Disclosure: Royston Yang owns shares of NetLink NBN Trust.

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