To The Moon

💰Don't fight the Fed. Powell remains firm on delaying rate cuts, while major tech stocks show mixed performance.

💹 $UOB Kay Hian(U10.SI)$/$SGX(S68.SI)$/$ocbc bank(O39.SI)$: Singapore's financial sector holds strong allocation value.

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| Market recap

Following a weak opening, $S&P 500(.SPX)$ closed up 0.03%, while $NASDAQ(.IXIC)$ fell 0.36%. $Meta Platforms, Inc.(META)$ marked a record with 17 consecutive days of gains. $NASDAQ Golden Dragon China Index(HXC)$ dropped 1.66%, as $Alibaba(BABA)$, partnering with Apple on AI for Chinese users, rose 1.31%.

Megacaps

$Tesla Motors(TSLA)$ fell over 6%, marking a 5-day losing streak and hitting its lowest close since November last year.

$Apple(AAPL)$ gained over 2%, selecting Alibaba as a partner to develop AI features for Chinese iPhone users. Jack Ma, the legendary entrepreneur, made a high-profile appearance at Alibaba’s Hangzhou headquarters, drawing widespread attention.

Consumer

Some major consumer stocks showed recovery, with $Coca-Cola(KO)$ up nearly 5%, $Papa John's(PZZA)$ jumping over 8%, and $McDonald's(MCD)$ advancing for a third consecutive trading session.

Asian markets today

Defying resistance, $XIAOMI-W(01810)$ climbed over 3.6%, with its market cap hitting new highs recently.

$MEITUAN-W(03690)$ dropped 4% in Hong Kong trading after $JD.com(JD)$ announced its entry into the food delivery market. JD.com begins merchant recruitment on February 11, offering a commission-free year for those joining before May 1.

The animated film Ne Zha 2 saw a box office boom, earning a high IMDb score of 8.2 and set for release in different countries. It will debut in the U.S. on February 14, followed by launches in Australia, Singapore, Japan, and South Korea. In China's A-shares market, $Beijing Enlight Media Co.,Ltd.(300251)$ surged, doubling its stock price compared to last Wednesday.

| Looking over your shoulder

Recently, fueled by AI advancements led by companies like DeepSeek, tech stocks have been soaring. However, the optimism is not without potential risks.

$Straits Times Index(STI.SI)$ gained 0.36% today. Yet uncertainties surrounding Trump-era policy expectations and the Federal Reserve’s interest rate remain. While capturing the investment value of AI-driven tech sectors, incorporating dividend-paying assets as a core strategy is a powerful way to protect portfolios.

In the Singapore, sectors like banking and financial services remain attractive for investors. Banks, known for their high dividends and low volatility, are a preferred choice for long-term investments. Additionally, the banking sector stands out with high dividend yields and relatively low price-to-book (PB) ratios, offering cost-effective allocation opportunities.

| Dividend Play For You

Banks demonstrate stable profitability, lower volatility, and sustainable dividend advantages. For example, $DBS Group Holdings(D05.SI)$ rose 1.6% on Monday after reporting a 12% YoY increase in net profit for the second half of 2024, reaching SG$5.65 billion compared to SG$5.03 billion a year earlier.

The financial sector also benefits from:

1. Active capital markets: Economic recovery drives higher investment activity, boosting securities trading volumes, IPOs, and demand for financial services (benefiting $SGX(S68.SI)$ and $UOB Kay Hian(U10.SI)$).

2. Rising interest rates: Global monetary tightening leads to higher interest rates, widening banks’ net interest margins and increasing profitability (benefiting $ocbc bank(O39.SI)$ ).

UOB Kay Hian (U10)

$UOB Kay Hian(U10.SI)$ is one of Asia's largest brokerage firms, listed on the Singapore Exchange (SGX). Operating in the financial services sector, the firm specializes in securities trading, investment banking, wealth management, and research services.

Founded in 1970, UOB Kay Hian has become a key player in regional financial markets, offering a comprehensive suite of products and services to retail, high-net-worth, and institutional investors. With a wide network spanning Singapore, Hong Kong, Malaysia, Thailand, and other key markets, the firm is well-regarded for its strong research capabilities and client relationships.

SGX (S68)

$SGX(S68.SI)$ is a leading multi-asset exchange established in 1999 and publicly listed. Operating within the financial services industry, SGX serves as the backbone of Singapore's capital markets, offering platforms for trading stocks, bonds, derivatives, and commodities, along with clearing services. Its derivatives market holds global significance, covering Asian equity index futures, forex, and commodity futures.

As a cornerstone of Singapore’s financial ecosystem, SGX is renowned for its liquidity, market diversity, and robust operations, making it the premier platform for investors and businesses alike.

OCBC Bank (O39)

Founded in 1932, $ocbc bank(O39.SI)$ is Singapore’s oldest local bank and one of Southeast Asia’s leading financial institutions. Operating in the banking and financial services sector, its core businesses include retail banking, commercial banking, corporate banking, investment banking, wealth management, and insurance (through its subsidiary Great Eastern).

As one of Singapore’s Big 3 banks, OCBC is known for its strong financial performance and exceptional customer service. Its brand is deeply trusted locally, playing a significant role in Singapore’s economic development.

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