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The Week Ahead DBS, Singtel and… US Midterm Elections

Has there ever been a more crucial US midterm election for global stock markets? Probably. According to experts, there have been 10 pivotal midterm elections since 1826.

This year’s results, which comes at a time of high stock-market volatility, hang in the balance. American voters will have to weigh up the benefits of more tax reforms, if the Republicans hold power, and an easing of global trade tensions, if the Democrats win.

On the earnings front, DBS Group (SGX: D05) will hope to match, if not surpass, the improved results of its two Singapore peers, namely, UOB (SGX: U11) and OCBC (SGX: O39), when it reports third-quarter earnings. In August, Singapore’s largest bank posted a 20% jump in net profit. That still fell shy of market expectations, though. But DBS said it expects net interest margin to increase for the full year.

Some accounting adjustments were behind a 56% drop in profits at Jardine Cycle & Carriage (SGX: C07) in the first half. However, underlying profit rose 10% and revenue was also up 10% in the first half.

It was a profitable first half for Genting Singapore (SGX: G13). The integrated resort owner posted a 4% rise in revenue and a 22% jump in net profits for the first six months. It could provide more insights into its bid for a gaming licence in Japan, when it reports third-quarter numbers.

A surge in demand for new homes ahead of property cooling measures in July helped City Developments (SGX: C09) report an 80% jump in second-quarter profits. Meanwhile, revenues climbed 60%. However, a repeat performance in the third quarter looks a stretch. The company said market dynamics changed after the harsh cooling measures.

SATS (SGX: S58) posted an 11.5% improvement in first-quarter profits in July. That was on the back of continued growth in aviation volume and higher revenues from Japan. SATS said it expects passenger volumes in Asia to grow, despite the threat of global trade uncertainties.

Weaker results from a couple of associates, namely, Airtel and Telkomsel, impacted first-quarter profits at Singapore Telecommunications (SGX: Z74). But competitive pressure at Airtel in India, and Telkomsel in Indonesia, have abated according to Singapore’s largest telecom operator.

ComfortDelGro (SGX: C52) expects revenue from its taxi business to be maintained and contributions from its new businesses in Australia, the UK and China to grow the business. In August, it posted a dip in second-quarter earnings, though revenues rose 5.4%.

On the economic front, the US Fed will announce its latest interest-rate decision. The Fed Fund rate is expected to be unchanged at 2.25%. China has some key Purchasing Managers’ Indices that could show the services sector is still expanding but at a slower pace.

And finally, Tuesday 6 November is Deepavali. It is a public holiday. So, put your feet, up, take a break, or, better still, pop down to Little India to see the lights.

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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 owns shares in DBS, UOB, OCBC, Jardines C&C and SATS.