Broker: Lim & Tan Securities
Date of Report: 2 May 2025

Singapore Market Insights May 2025: Key Earnings, Sector Strategies, and Institutional Flows

Market Overview: Equities, Bonds, and Commodities Performance

Singapore’s FSSTI Index closed at 3,832.5, up 0.7% for the day, holding steady month-to-date and posting a 1.2% gain for the year. Major global indices saw mixed performance, with the S&P 500 up 0.6%, Nasdaq gaining 1.5%, and the Dow Jones inching up 0.2%. Notably, Hang Seng surged 10.3% year-to-date, while Japan’s Nikkei posted an 8.6% decline.

Key rates saw the 3-month SGD SORA at 2.4% (-7.2% MTD, -22.6% YTD) and Singapore’s 10-year bond yield at 2.5% (-7.7% MTD, -13.4% YTD). US 10-year yields were at 4.2%.

Apple’s Earnings: Implications for Supply Chains and Nanofilm

Apple’s highly anticipated quarterly report disappointed investors, with shares dropping as much as 4.2% in late trading after the second-quarter release. Concerns stem from escalating tariffs and a sales slowdown in China, with regional sales falling 2.3% to US\$16 billion—below analyst expectations. CEO Tim Cook flagged a US\$900 million tariff cost increase for the current quarter and no guidance on future tariff impacts.

• China remains a challenge: Apple’s sales shortfall, loss of market share to local rivals (Huawei, Xiaomi, Oppo), and delays in launching Apple Intelligence AI in China.
• Product pipeline: Foldable iPhone expected next year; AI services to launch in China via Alibaba and Baidu partnerships.
• Capital return: Share buyback program increased by US\$100 billion; quarterly dividend up 4% to 26 cents/share.
• Overall sales rose 5% to US\$95.4 billion (above consensus); EPS at \$1.65 (vs. \$1.62 est).
• Wearables, Home and Accessories sales missed estimates at \$7.52 billion (\$8.05 billion est).
• Production shift: Apple is moving more US-bound iPhone production to India, now meeting half of US demand.

Impact on Nanofilm: Apple’s supply chain shift away from China is negative for Nanofilm, a key Apple parts supplier listed on SGX. Nanofilm trades at 22x 2025 PE, offers a 1% dividend yield, and has a consensus target price in the S\$0.45–0.50 range. The recommendation remains “SELL.”

Mapletree Industrial Trust (MIT): Stable Results and Attractive Yield

Mapletree Industrial Trust (MIT, \$2.02) reported solid FY2024/25 results:

• Distribution to Unitholders: Up 2.0% YoY to S\$386.0 million
• DPU: Up 1.0% YoY to 13.57 cents
• Gross Revenue: Up 2.1% YoY to S\$711.8 million
• Net Property Income: Up 2.0% YoY to S\$531.5 million
• Growth drivers: Completion of Osaka Data Centre phases, Tokyo mixed-use facility acquisition, robust Singapore lease renewals
• Portfolio Valuation: 141 properties valued at S\$9.04 billion (+2.7% YoY)
• Occupancy: Overall portfolio at 91.6%; Singapore up to 92.9%, North America down to 88.2%
• Rental Reversions: Positive, with an 8.1% weighted average increase
• Borrowing Cost: Reduced to 3.0% in 4QFY25, with 78.1% of debt hedged; debt tenor extended to 3.2 years
• Divestment: Proposed sale of 2775 Northwoods Parkway, USA at US\$11.8m (18.6% premium to valuation)

Outlook: MIT faces headwinds from higher expenses, borrowing costs, and global trade uncertainty. However, resilience is underpinned by selective divestments and accretive investments. The REIT trades at 1.1x P/B, offers a 6.7% dividend yield, and has a consensus target price of S\$2.42 (19.8% upside). The recommendation remains “BUY.”

Sector Metrics: Highest Dividend Yields and Lowest Valuations on SGX

Macro Environment: Global Trade, Policy Uncertainty, and Economic Impact

China’s National Development and Reform Commission has relaxed its “negative list”, reducing restricted industries to 106 from 117 to attract foreign investment amid weak domestic consumption and property sector woes. Partial liberalization now covers television, telecommunications, pharmaceuticals, medical devices, and logistics. Despite these changes, areas like unmanned aerial vehicles and e-cigarettes remain restricted.

Foreign direct investment in China plummeted 27.1% in 2024, the largest drop since 2008. The “entry unless prohibited” policy aims to spur private investment, innovation, and competition. However, US tariffs and global trade frictions pose substantial risks.

In the US, the University of Michigan’s Consumer Sentiment Index fell sharply to 50.8 in April, with inflation expectations surging to COVID-era highs. Employment outlook and consumption are weakening, reducing the likelihood of aggressive Fed rate cuts. Defensive asset allocation and curve steepeners are recommended to manage risk in a challenging macro climate.

Share Transactions: Insider Trades and Buybacks

Major acquisitions and disposals in April included:

• Aoxin Q&M Dental Group: 87.97 million shares acquired by Q&M Dental Group, raising stake to 50.51%
• UOB Kay Hian: Wee Ee Chao purchased 788,360 shares, stake at 35.35%
• UMS: Integration Catcher Tech Co Ltd bought 950,000 shares, stake at 5.12%
• Unionsteel Holdings: Ang Yew Chye acquired 45,000 shares, 12.26% stake
• Disposals: Notable sell by NSL Ltd (10 million shares at \$0.75), CNMC Goldmine (750,000 shares)
• Share buybacks: Major activity from HK Land, Capitaland Invest, Yangzijiang Shipbuilding, DBS, UOB, OCBC, SGX, ST Engineering, Seatrium, Venture, and others.

Institutional and Retail Fund Flows: Sector Trends and STI Constituents

For the week of 21 April 2025:

• Institutional investors were net sellers (-S\$192.7m), sharply reversing from net buying the previous week.
• Retail investors were minor net sellers (-S\$2.2m).

Sector flows show institutions favoring Real Estate (excluding REITs), Industrials, and Consumer Cyclicals, while pulling back from Financial Services, REITs, and Technology. Retail flows were skewed toward Financials and Mapletree Logistics Trust, with outflows from Singtel and SGX.

Upcoming Dividends and Special Distributions

SGX Watch-List: Companies Under Regulatory Scrutiny

As of June 2025, 32 companies are under the SGX watch-list, including latest additions such as Addvalue Technologies, Renaissance United, Telechoice, Tiong Seng Holdings, Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare. This watch-list highlights ongoing regulatory oversight and the need for investors to monitor compliance and performance risks.

Conclusion and Strategic Outlook

The Singapore market continues to face external headwinds from global trade tensions, evolving regulatory frameworks, and macroeconomic volatility. Investors are advised to focus on fundamentally resilient companies with stable dividends and prudent capital management, such as Mapletree Industrial Trust and other top-yielding blue chips. Defensive positioning, sector rotation, and close monitoring of fund flow trends remain critical for outperformance in the months ahead.