(Bloomberg) — Singapore’s two largest new-economy firms have been touted as the next big thing for years. A $71 billion rout in their share prices in 2022 seems to show investors aren’t buying the story.
Shares of ride-hailing company Grab Holdings Ltd. have more than halved since the start of the year while gaming and e-commerce giant Sea Ltd.’s stock price has tumbled by 46%. The two U.S.-listed firms are languishing at the bottom of the MSCI Asean Index, with Grab among the biggest losers on the Asia Pacific stock benchmark as well.
The slump comes months after MSCI Inc. added the shares to its indexes amid much fanfare as it sought to give its regional gauges more exposure to new economy stocks. The tech selloff and waning global interest in special purpose acquisition companies have taken a toll on the firms.
“Passive investors would have lost a fair bit of money on these stocks,” said Brian Freitas, an analyst who publishes research on independent research website Smartkarma. Future price action “depends on how the companies perform and the global macro environment — neither of which look terribly encouraging at the moment.”
Grab was added to the MSCI Asean Index in February, hot on the heels of its merger with blank-check company Altimeter Growth Corp. Sea’s inclusion in the gauge began in May last year.
Freitas estimates that passive holdings of Sea and Grab are close to $2.8 billion and $280 million, respectively. The stocks have lost a combined $71 billion in market value this year.
Judging by the earnings outlook, there may be little respite in store. Sea, which counts Chinese social media leader Tencent Holdings Ltd. as its biggest shareholder, is betting on growth at its online retail unit Shopee as its gaming arm faces slower bookings. But, Sea shut its main e-commerce operation in India on March 29, soon after the country banned its marquee flagship game Free Fire along with dozens of apps it says are of Chinese origin, citing security concerns.
“Shopee’s growth trajectory is flattening rapidly alongside India and France exits,” said Oshadhi Kumarasiri, an equity analyst with LightStream Research. “For a company priced expensively based on its future growth, it’s difficult to brush off the impact of an exit from a huge market like India. The growth story of Sea is falling apart.”
Meanwhile, Grab’s losses are mounting and the firm continues to splurge on subsidies.
Still, analysts have been slow to cut target prices given the two companies’ status as market leaders in Southeast Asia. They expect a return of at least 68% on both stocks over the next 12 months, according to data compiled by Bloomberg.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
