The Week Ahead: Can OCBC Keep Up?

It is another holiday-shortened trading week for us in Singapore. Wednesday is Vesak Day, which means that we can take a rest from gazing at our portfolio and focus instead on more important matters instead.

But there will be no rest for some companies as they get ready to report quarterly results. Oversea-Chinese Banking Corporation (SGX: O39) is the last of the three Singapore banks to report. The pressure will be on OCBC to deliver numbers as good as its two rivals.

In February the bank disappointed with weaker-than-expected numbers for the final quarter of 2016. The bank said net interest income fell and provisions for bad loans surged. But that could have been due to some kitchen-sinking before the start of the new financial year.

Integrated resort operator Genting Singapore (SGX: G13) is expected to mirror the rebound in Macau casino revenues, when it reports first-quarter earnings. The company could also benefit from the strengthening of the Malaysian ringgit, which could encourage more visitors from across the Causeway.

SIA Engineering (SGX: S59) said in February that the operating environment of the aerospace industry remained challenging in the face of economic uncertainty. But things could start to look up for the Singapore Airlines (SGX: C6L) subsidiary as uncertainty starts to abate.

Defence contractor Singapore Technologies Engineering (SGX: S63) reported a 21% rise fourth-quarter earnings last time out. But it was a bit of a curate’s egg. Aerospace performed reasonably well, though revenues at Land Systems and Electronics were flat. That said, ST Engineering said it ended the year with $11.6 billion of orders, which should be delivered this year.

Other companies with results include Wilmar International (SGX: F34), UOL Group (SGX: U14) and City Developments (SGX: C09).

On the economic front, the US will report its latest inflation numbers. In April, the annual rate of inflation fell back slightly to 2.4% from 2.7% in February. The slight drop was due to a slowdown in energy and services costs.

China will also report inflation numbers. In March they were an anaemic 0.9%, which was slightly below market expectations. The cost of politically-sensitive food fell by 4.4%, with pork prices down by 3.2% and fresh vegetables some 11.8% lower.

And finally, Singapore will report retail sales for March. They unexpectedly fell 4.4%, as a result of a decrease in sales of food and beverage and a drop in department stores sales.

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