PSR Weekly Market Outlook 5 Min Summary

Dated: 02/03/2026         Source: https://youtu.be/4kxpGT4EPoM 

 Presentation Summary

Technology Sector Highlights

• Salesforce (CRM): The company met revenue expectations for Q4 2026, while adjusted earnings per share ($3.82) beat guidance. Growth was driven by the Platform Cloud (up 37%), which includes Agentforce and Slack. A new metric, Agentic Work Units (AWU), showed a 57% quarter-over-quarter increase, demonstrating actual enterprise value creation from AI. However, operating margins fell by 1.5% due to higher R&D and marketing costs. The rating is Buy with a target price (TP) of $253.
• Nvidia (NVDA): Revenue was within expectations, but profits beat estimates due to sustained margins despite a 42% surge in memory prices. Nvidia successfully maintained margins by bundling products into system-level racks (GB200/GB300). Networking revenue jumped 2.6x year-over-year. The stock was upgraded to Buy with a $120 TP.
• AEM Holdings: Reported an FY25 turnaround with a 32% increase in PATMI. Optimism is fueled by a potential new contract with a hyperscaler customer and increased orders from Intel.
• Venture Corporation: Upgraded to Accumulate. While revenue has been declining since 2017, margins are at record highs, and a rebound is expected in FY26 driven by next-generation Philip Morris products and data center networking demand.

Singapore Banking Sector

• UOB: Q4 earnings were slightly below estimates due to lower net interest income (NII), which fell 4% following a 16-basis point margin compression. A positive highlight was the 10% recovery in fee income. The rating is Neutral with a $37 TP.
• OCBC: Earnings also fell slightly below estimates, but non-interest income surged 37%, primarily driven by wealth management. Management remains committed to a $2.5 billion capital return plan. The rating is Accumulate with a $21.50 TP.

Industrial and Engineering Stocks

• ST Engineering: Upgraded to Buy following strong results where commercial aerospace EBIT jumped 25% due to increased maintenance and engine part production. Geopolitical tensions are expected to provide a significant defense tailwind, as the company aims to double international defense sales.
• Pan-United: Revenue increased 16% and PATMI surged 35%, driven by higher volumes and project take-ups. The company is utilizing its AiR digital platform to optimize truck allocation and lower costs. The rating is Buy with a $1.73 TP.
• Sembcorp Industries (SCI): Maintained at Accumulate despite a 25% drop in gas earnings, as renewables capacity grew 19% and a pending $5 billion Australian acquisition is expected to be earnings-accretive.

REITs and Aviation

• S-REITs: The sector saw mixed performance; overseas commercial and hospitality REITs stood out, while retail was impacted by holiday outflows. Broadly, FY25 results met expectations with 2% DPU growth. Retail REITs benefit from high occupancy, while the office sector sees a "flight to quality".
• Singapore Airlines (SIA): Passenger traffic increased 6.3%, but air cargo revenue fell 5%. Associate losses from Air India increased due to new labor laws. The rating is Neutral with a $7 TP.

Macro and Technical Outlook

• Technical Pulse: The S&P 500 is in a sideways consolidation phase. Analysts remain bullish on US Treasury bonds, gold, and oil for March, while Bitcoin remains in a downtrend.

 

Q&A Session

1. Financials and Banking Sector

• Top Dividend Pick: DBS is highlighted as the best choice for investors seeking stable dividends and a predictable stock price. Unlike its peers, DBS provides fixed dividend-per-share (DPS) guidance through 2027 and pays quarterly.
• Capital Adequacy: All three major Singapore banks (DBS, OCBC, UOB) maintain similar CET1 ratios of approximately 15%. However, DBS is more transparent about its capital return plans.
• OCBC and Great Eastern (GE): GE remains a positive tailwind for OCBC, though it contributes less than 8% of total income. Management has stated there are no plans to privatize GE in the near term (3–5 years).
• Geopolitical Impact: The conflict involving the US and Iran is expected to have a muted impact on local banks. If the situation leads to higher-for-longer interest rates, it could actually benefit net interest margins.

2. Technology and Semiconductors

• AEM vs. Frencken: AEM Holdings is viewed as having a superior growth forecast compared to Frencken. This is driven by a potential new contract with a hyperscaler and stronger profit growth. Frencken's recent performance has been lackluster as a key customer (ASML) reorganizes orders for next-generation EUV systems.
• Salesforce AI Positioning: Salesforce is considered well-positioned in the AI software market through its "Agentforce" platform. Analysts believe the company is less vulnerable to AI disruption because of its clear three-level monetization strategy (premium SKUs, consumption credits, and seat expansion).
• Nvidia (NVDA) and Broadcom (AVGO): Nvidia’s stock drop post-results was attributed to a general sector re-rating and concerns over the sustainability of hyperscaler capital expenditure, despite strong fundamentals. Broadcom is expected to benefit from high demand for AI networking and internet switches.

3. REITs and Real Estate

• Lendlease Global Commercial REIT: The rights issue to acquire the remaining 30% of PLQ Mall is viewed as a strategic move. Analysts suggest opting in if investors believe in the long-term growth of Singapore suburban retail.
• US Office Market: A "buy" rating is maintained for Prime US REIT based on signs that the US office market is bottoming out, with stabilizing occupancy and lack of new supply.
• Residential Outlook: PropNex and APAC Realty saw share price pressure due to guidance suggesting softer new home sales for the remainder of 2026.

4. Industrials, Energy, and Aviation

• Building Materials: Both Pen-United and BRC Asia are identified as prime beneficiaries of the ongoing Singapore construction upcycle, which is expected to peak next year.
• Gold Stocks: Analysts prefer miners like CNMC Goldmine over retail gold concepts (e.g., MoneyMax). CNMC offers higher upside due to production growth from its new underground mining facility and exploration at new sites.
• Oil and Geopolitics: The team views major sell-offs in oil and semiconductor stocks as buying opportunities, betting that current Middle Eastern tensions will be short-lived (1–2 weeks). Keppel may benefit indirectly through its legacy rig assets.
• Aviation: SIA maintains a Neutral rating with a $7 target price. While fuel costs are a risk, SIA’s hedging policy provides significant protection. SATS is viewed as structurally stronger following its global acquisition of WFS.

5. Technical Analysis (TA) Highlights

• Nvidia (NVDA): Shows a potential "head and shoulders" pattern; a break below $171 would signal further short-term weakness.
• SIA: Tested resistance at $6.65, which is now acting as support.
• ComfortDelGro: Remains range-bound between $1.45 and $1.51.

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Companies, sectors, countries and regions affected in “THE 2028 GLOBAL INTELLIGENCE CRISIS”

Source: 

THE 2028 GLOBAL INTELLIGENCE CRISIS

https://www.citriniresearch.com/p/2028gic 

Companies, sectors, countries and regions affected in “THE 2028 GLOBAL INTELLIGENCE CRISIS”.

Negatively Affected Companies and Sectors

• ServiceNow: Experienced significant revenue destruction and a collapse in net new ACV growth as customers cut human staff, leading to the cancellation of seat-based licenses.

• Zendesk: Became the "smoking gun" for the private credit crisis after defaulting on a $5 billion direct lending facility when AI agents rendered its human-centric ticketing and support model obsolete.

• American Express (AXP): Cited as the bank hit hardest by a combination of white-collar workforce reductions gutting its customer base and AI agents routing around credit card interchange fees.

• DoorDash and Uber Eats: Their "habitual intermediation" moats were destroyed as AI agents optimized for the lowest fees and fastest delivery across multiple platforms, compressing margins to nearly nothing.

• Software and SaaS Providers: Companies like Salesforce, Monday.com, Zapier, and Asana faced intense pressure as enterprises used agentic coding tools to replicate their functionality or demand massive renewal discounts,,.

• Payment and Finance Firms: Mastercard, Visa, Synchrony, Capital One, and Discover saw revenue pressure or stock price declines as agents bypassed traditional transaction fees in favor of stablecoins.

• Alternative Asset Managers and Insurers: Firms like Blackstone, Apollo, KKR, and Brookfield faced systemic risks as the private credit market defaulted. Their affiliated insurers—Athene, Global Atlantic, and American Equity—faced downgrades and capital scrutiny,,.

• Indian IT Services: TCS, Infosys, and Wipro faced accelerated contract cancellations as the marginal cost of AI coding agents undercut the cost of human developers in India.

• Travel and Real Estate Platforms: Booking.com, Expedia, and Zillow were disrupted as AI agents bypassed their platforms to assemble itineraries or facilitate property transactions with minimal commissions.

• AI Labs (Anthropic and OpenAI): While economically successful, they faced severe social backlash, including three-week blockades by the "Occupy Silicon Valley" movement.

Negatively Affected Countries and Regions

• India: Perhaps the most negatively impacted nation, India saw its IT services export model collapse. The rupee fell 18% against the dollar, and the country was forced into "preliminary discussions" with the IMF for financial assistance.

• United States: Faced a systemic "Intelligence Displacement Spiral" leading to 10.2% unemployment, a 38% drawdown in the S&P 500, and a fiscal crisis as tax receipts plummeted.

• U.S. "Tech-Heavy" Cities: San Francisco, Seattle, Austin, and Manhattan experienced sharp declines in home values (up to 11%) and spikes in mortgage delinquencies as high-earning white-collar professionals lost their jobs.

• U.S. "Blue States": States dependent on income tax faced default risk in their municipal bonds as the professional class's income was structurally impaired.

PSR Weekly Market Outlook 5 Min Summary

 Dated: 23/02/2026 Source: https://www.youtube.com/watch?v=hAGKvsBuN00 

Presentation Summary

US Technology and Platform Growth

• Advertising and Engagement: Reddit exceeded expectations with 75% year-on-year (YoY) ad revenue growth, fueled by AI-driven search and a surge in small and medium business spending. The company authorized a $1 billion share repurchase program. AppLovin's advertising segment grew 66%, benefiting from its AXON AI engine, which enables a 30-day advertiser payback period—significantly faster than the industry average.

• Consumer Personalization: Spotify reached a record 751 million monthly active users, utilizing proprietary data for deep personalization that analysts believe is a key competitive moat. Shopify reported that AI-originated orders have grown 15 times since January 2025.

• Enterprise AI: Palantir achieved a new high in commercial growth, with revenue up 82% YoY. Its ontology and AIP offerings are driving enterprise AI adoption beyond traditional defense sectors.

The "Magnificent 7" and Hyperscaler Trends

• AI Infrastructure Spending: A massive increase in capital expenditure (Capex) from "hyperscalers" like Alphabet, Amazon, and Meta is a dominant theme. This spending is projected to generate $280 billion in revenue for Nvidia over the next six quarters from its Blackwell and Rubin GPUs.

• Corporate Divergence: Microsoft’s Azure business grew 40% YoY, but its share price was pressured by a 66% YoY increase in Capex ($37.5 billion). Meta successfully communicated its AI monetization roadmap, leading to an 8% share price rise despite its own high Capex guidance. Conversely, Tesla was described as a "disaster," facing declining earnings and market share losses in China, with analysts skeptical about the near-term commercial viability of its robotics and autonomous vehicle projects.

Singapore Financials and Real Estate

• Banking Outlook: DBS remains a favorite for its fixed dividend policy, with a projected 2026 payout of $3.30 per share. Analysts clarified that a recent specific provision for a Hong Kong real estate loan was a prudent accounting shift rather than a systemic concern. While lower interest rates may compress net interest margins, they are expected to drive mid-to-high single-digit loan growth in 2026.

• REITs and Investment: CapitaLand Investment (CLI) is targeting $200 billion in funds under management (FUM) by 2028, which analysts believe will require M&A supported by CLI’s estimated $6 billion in debt headroom. Prime US REIT saw occupancy stabilize and trend upward to 82.7%.

Construction and Macroeconomics

• Construction Super-Cycle: The Building and Construction Authority (BCA) forecasts that construction contracts will reach $50 billion in 2026, which is 60% higher than the 20-year historical average of $31 billion. BRC Asia is a primary beneficiary of this trend, commanding 60% market share in Singapore’s steel rebar for construction. The company’s order book has reached a record high of $2.2 billion, providing strong revenue visibility

• Global Multipliers: Singapore’s economy is showing the "AI spending multiplier" effect; semiconductor exports jumped 80% YoY in January, the best growth in 15 years.

• Trade Dynamics: Regarding US tariffs, while a 15% tariff is a risk for Singapore, ASEAN nations like Vietnam and Thailand are seen as major winners as manufacturing shifts away from China.

Q&A Summary

1. Banking and Financial Services

• DBS Provisions and Stability: Analysts addressed concerns regarding a specific provision for a Hong Kong real estate non-performing loan (NPL). This was characterized as a prudent shift from general to specific provisions due to the borrower's liquidity pressures and is not considered a cause for broader alarm.

• Dividend Policies: DBS remains the preferred pick for its clear dividend policy, which includes a fixed dividend per share and a 24-cent annual step-up. A 2026 dividend of $3.30 per share is projected, yielding 5.7%.

• Capital Returns (OCBC & UOB): Investors questioned potential capital returns for OCBC and UOB. OCBC was noted for having the highest excess capital among local banks, though management has remained quiet on specific distribution plans. For UOB, the focus is on whether provisions will stabilize following preemptive spikes in the previous quarter.

• Macroeconomic Impact: Analysts stated that proposed 15% US tariffs would likely not trigger a significant sell-off in Singapore bank stocks. Additionally, while lower interest rates may compress margins, they are expected to drive mid-to-high single-digit loans growth in 2026, though fee income will be required to fully buffer the decline in interest income.

2. Technology and Manufacturing

• Nvidia and AI Infrastructure: Following AMD's lead, Nvidia is expected to face pressure to provide greater visibility into its 2027 roadmap. Sustained demand is anticipated from hyperscalers and sovereign nations building out AI infrastructure.

• Frencken and Ultra Green AI: The target price for Frencken is currently maintained at $1.87, with a potential revision pending results due at the end of the month. Regarding Ultra Green AI, the analysts clarified they have not initiated coverage and do not currently have a valuation metric for the stock.

• iFAST: A "soft outlook" and the lack of hard figures for specific projects like the Hong Kong e-pension have led to pullbacks as analysts cut FY26 estimates.

3. Real Estate and Construction

• BRC Asia: Management expects revenue and earnings to peak in the third quarter of 2026, with this elevated performance sustained through the end of 2027, supported by a record $2.2 billion order book.

• CapitaLand Investment (CLI): To reach its target of $200 billion in funds under management (FUM) by 2028, CLI will likely require M&A activity$. Analysts estimate CLI has approximately 6 billion in debt headroom (gearing from 0.43 to 0.9 times) to fund these acquisitions.

• Keppel REIT: The potential sale of the One Raffles Place asset for an estimated $2.3 to $2.4 billion was discussed. The impact on share price will depend on whether the capital is redeployed into higher-yielding assets.

4. Aviation and Diversified Holdings

• SIA Engineering: Reported a 17% increase in net profit, driven by higher rates in recontracted agreements with SIA and an easing of supply chain constraints.

• SIA: Analysts are monitoring the narrowing of losses from associates and the trajectory of passenger revenue, which has shown signs of softening.

• Thakral: Strong performance is expected to continue, fueled by its lifestyle business (projected 30%+ growth) and fair value gains from its listed investments, such as Gem Life and Beauty Tech Group.