CGS International May 9, 2025
Trendspotter: Market Rally Continues, Singapore Equities Offer Opportunities
Global Market Overview
Wall Street experienced a prevailing risk-on mood on Thursday, with stocks advancing and bonds retreating. The market sentiment was significantly influenced by President Donald Trump’s announcement of a trade deal with the UK and his comments suggesting tariffs on China could be lowered if ongoing talks progress favorably. Further boosting equities, the president explicitly advised investors to buy shares. This news, signaling potential easing of tensions with major commercial partners, was sufficient to lift the S&P 500, which briefly surpassed its April 2 high before paring gains.
The rally was broad-based, with most major industries participating. Gains were notably led by economically-sensitive sectors, reflecting increased investor confidence. In currency and commodity markets, the safety bid diminished, causing gold and haven currencies to fall. Treasury yields surged as traders reduced their bets on interest-rate cuts.
President Trump hailed his trade framework with the UK as a historic achievement and the initial step in his ambitious effort to overhaul the global economy. As the US prepares for crucial talks with China, the primary target of Trump’s tariff strategy, the president expressed belief that negotiations could yield tangible progress. Matt Maley at Miller Tabak + Co. commented that the details emerging from the UK trade deal and the progress in US-China talks this weekend should provide investors with greater clarity on the potential impact of trade issues on the US and global economy. Trump also linked promising trade news with Republican initiatives to extend and expand his signature tax cuts as reasons for investor optimism, stating, “This country will hit a point that you better go out and buy stock.”
The market reaction saw the S&P 500 rise by 0.6%, the Nasdaq 100 gain 1%, the Dow Jones Industrial Average add 0.6%, and the Russell 2000 climb 1.8%. Bitcoin also saw a significant surge, surpassing $100,000.
Deep Dive: Singapore Equities
The report also highlights specific opportunities within the Singapore market, focusing on DBS Group and LHN Ltd.
DBS Group (SIN: DBS) – Confident Guidance Amidst Uncertain Outlook, Upgrade to Add
At its analyst briefing held on the morning of May 8, 2025, DBS Group reaffirmed its FY25F guidance of flat year-on-year Profit Before Tax (PBT), despite the backdrop of rising global economic uncertainty.
Analysts believe that DBS’s management overlay of approximately S$2.6 billion of its S$4.16 billion in General Provisions (GPs) as of the end of 1Q25 is ample to cater to a potential ‘stress scenario’. Furthermore, the bank’s excess capital of approximately S$7.73 billion as of 1Q25 is seen as sufficient to sustainably support a more extensive capital return policy between FY25-27F.
Based on these factors, the recommendation for DBS Group has been upgraded to ‘Add’ with a higher target price of S$47.90. The rationale for the upgrade is that DBS’s capital return initiative is expected to improve yield attractiveness for investors while simultaneously lifting its long-term Return on Equity (ROE).
LHN Ltd (SIN: LHN) – Technical Buy Signal
The technical analysis for LHN Ltd suggests that the uptrend for the stock remains intact, presenting a ‘Technical Buy’ opportunity.
The last traded price for LHN was 0.490. The report provides specific entry points, support and resistance levels, a stop loss, and multiple target prices based on technical indicators.
Last Price: 0.490
Entry Price(s): 0.490, 0.440, 0.420
Support 1: 0.435
Support 2: 0.385
Stop Loss: 0.380
Resistance 1: 0.560
Resistance 2: 0.620
Target price 1: 0.600
Target price 2: 0.650
Target price 3: 0.700
Target price 4: 0.780
LHN Limited is described as a company providing property management services, including industrial, commercial, residential property management, and other related services. The company also offers logistics services.
According to the technical snapshot provided by Analyst CHUA Wei Ren, CMT, LHN’s price action demonstrates strong bullish pressure, indicating a likely conclusion to a 3-wave corrective structure.
Key technical observations include:
LHN has broken out of a corrective channel/flag pattern, which signifies the completion of a 3-wave corrective move.
Another strong breakout from the flag pattern highlights the initiation of a bullish continuation phase.
The Ichimoku indicator is displaying a strong bullish signal.
The Stochastic oscillator has confirmed an oversold crossover, typically a bullish signal.
The 23-period Rate of Change (ROC) has risen above the zero line, suggesting increasing bullish momentum.
Volume has increased above the 20-period average, indicating healthy expansion accompanying the price movement.
Figure 1, referenced in the report, provides a daily timeframe chart illustrating these technical points.
