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Singapore Earnings Season: Winners & Losers

coins cash moneyIn some countries, they might look forward to the fishing season. In other countries they might look forward to the hunting season. Personally I don’t see the attraction in either. But here in Singapore, we do have the company-earnings season to keep us on the edge of our seats every three months.

The blue-chip earnings season doesn’t exactly kick off in earnest until about the first week of August. But over the next couple of weeks a trickle of results could provide us with a taste of things to come.

On the whole, we could see slightly improved numbers from the 30 companies that make up the Straits Times Index (SGX: ^STI). In particular, farmers and commodity-related business could raise a smile or two thanks to improved palm-oil prices. So, look out for the figures from Golden Agri-Resources (SGX: E5H) and Olam International (SGX: O32) around the middle of August.

The results from our main banks could bring a cheer or three. As the global economy continues to crawl out of recession, banks could benefit directly. After all, they are at the forefront of the economy. Additionally, as heavyweight components of our benchmark index, our three main financial institutions could have a disproportionate effect on the STI.

Telecoms could tread water this quarter. But Singapore Telecoms (SGX: Z74), which is heavily exposed to Australia through its ownership of Optus, could find its figures flattered by favourable exchange rates.

Property companies could be a damp squib, though. High real estate prices, which have prompted governments to introduce property-cooling measures, could cast a shadow over our developers. But listen out for their outlook statements. They could provide useful pointers as to what might happen next at companies such as City Developments (SGX: C09) and CapitaLand (SGX: C31).

Earnings season can be a busy time for the market. But try to bear in mind that one bad quarter doesn’t necessarily make for a bad company.

If you believe that a business is likely to perform well over the long term, then any market overreaction to a disappointing set of quarterly numbers could be just the buying opportunity you might have been waiting for.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.