OCBC Investment Research
Date of Report: 18 June 2025

Global Markets Rattle as Geopolitical Tensions and Weak Data Drive Volatility: In-Depth Analysis & Singapore STI Stock Insights

Market Overview: Risk-Off Sentiment Prevails Amid Geopolitical Uncertainty

Global financial markets faced heightened volatility as escalating Middle East tensions, particularly between Israel and Iran, spurred fears of broader US involvement and potential supply disruptions. Oil prices surged to their highest since January, with Brent crude reaching around US\$76.45 per barrel and WTI crude at US\$74.84 per barrel, both up over 4% in a single session. The energy sector benefited, while most other sectors declined.

• US Equities: Major indices slumped—S&P 500 fell 0.84% to 5,982.7, Dow Jones lost 0.70% (down 299.29 points), and Nasdaq Composite dropped 0.91%. The Cboe Volatility Index spiked to 21.6.
• Economic Data: US retail sales fell 0.9% month-on-month, with consumer caution rising. Notably, restaurant and bar spending posted the largest two-year decline, and industrial production and homebuilder confidence both weakened.
• Safe Haven Flows: Despite earlier “Sell America” trends driven by US tariff policy, investors flocked back to US Dollar and Treasuries amid global uncertainty.
• Federal Reserve: Markets expect the Fed to keep rates steady at 4.25–4.50%, pending more clarity on trade and geopolitical developments.
• Europe: Stoxx Europe 600 Index down 0.85%. Energy stocks bucked the trend, rising 1.2%.
• Asia: MSCI Asia Pacific Index slipped 0.1%. Tech stocks outperformed, notably TSMC and Samsung. Bank of Japan held rates at 0.5%.

Singapore Market Highlights: STI Resilience Amid Global Turmoil

The Straits Times Index (STI) closed at 3,930.6, up 0.6%, displaying resilience compared to global peers. Market turnover reached S\$981.1 million with volume surging 21.3% to 1,150.8 million shares. REITs and real estate sectors led gains, each up 1.1%. The market breadth remained positive, with 268 gainers versus 222 losers.

The Singapore Dollar strengthened against the US Dollar (USDSGD at 1.2864, -0.5%), while gold and silver prices edged higher, further reflecting risk aversion.

Latest OCBC Investment Research Reports: Key Calls and Sector Views

OCBC Investment Research recently released several reports covering a range of leading Singapore, Hong Kong, and China stocks. Highlights include buy ratings on SIA Engineering, MTR Corp, Seatrium, Boustead Singapore, CapitaLand Ascendas REIT, and NetLink NBN Trust, among others.

• SIA Engineering Co Ltd (SIE SP): Upgraded with a BUY rating and fair value raised to SGD 3.50, reflecting optimism about its growth trajectory.
• Nanofilm Technologies (NANO SP): Maintained at HOLD with a fair value of SGD 0.595, awaiting clearer catalysts.
• Bank of China (Hong Kong) [2388 HK]: HOLD, fair value HKD 38.00, citing robust operating performance.
• Agricultural Bank of China [1288 HK, 601288 CH]: HOLD/BUY, fair values HKD 5.90 / CNY 6.65, recognized for peer-leading growth.
• MTR Corp (66 HK): BUY, fair value HKD 31.50, supported by a new CAPEX cycle.
• China CITIC Bank [988 HK, 601998 CH]: BUY, fair values HKD 7.80 / CNY 8.95, noted for high dividend yield.
• ST Engineering (STE SP): HOLD, fair value SGD 8.54, buoyed by industry sentiment.
• Seatrium Limited (STM SP): BUY, fair value SGD 2.76, focused on project delivery.
• Boustead Singapore (BOCS SP): BUY, fair value SGD 1.46, recognized for resilience.
• CapitaLand Ascendas REIT (CLAR SP): BUY, fair value SGD 3.21, deepening Singapore presence.
• SATS Ltd (SATS SP): BUY, fair value SGD 3.73, but cautioned on near-term turbulence from tariffs.
• Singtel (ST SP): BUY, fair value SGD 4.51, stepping up capital management.
• City Developments Ltd (CIT SP): BUY, fair value SGD 6.01, with encouraging 1Q25 updates.
• First Solar Inc (FSLR US): BUY, fair value USD 427.00, poised to benefit from US tax credits.
• NetLink NBN Trust: BUY, fair value SGD 1.01, stable distribution outlook.

STI Constituents: In-Depth Company Profiles and Valuations

Below is a comprehensive table of the top STI stocks, reflecting market capitalization, valuation metrics, and OCBC’s recommendations.

Other notable stocks in the STI include Keppel Ltd, CapitaLand Investment, Sembcorp Industries, CapitaLand Ascendas REIT, Thai Beverage, Jardine Cycle & Carriage, Yangzijiang Shipbuilding, Genting Singapore, Seatrium, Mapletree trusts, UOL Group, DFI Retail, City Developments, SATS Ltd, Frasers Centrepoint Trust, Venture Corp, and Frasers Logistics & Commercial Trust. The table above captures their market positions, dividend yields, and earnings multiples, providing investors with a comprehensive snapshot for strategic portfolio allocation.

Key Takeaways and Outlook

• Global markets are likely to remain volatile, driven by geopolitical risks, energy prices, and evolving monetary policy stances.
• Singapore’s market has shown notable resilience, with REITs and real estate sectors outperforming during global uncertainty.
• Leading STI constituents, especially major banks, telecoms, and industrials, offer attractive yields and stable earnings, making them a core focus for investors seeking defensive plays.
• OCBC Investment Research’s latest reports highlight select opportunities in the aviation, infrastructure, technology, and logistics sectors, with a bias towards companies demonstrating operational resilience and dividend strength.

As investors navigate the second half of 2025, close attention to macroeconomic indicators, interest rate directions, and strategic sector allocation will remain critical for outperforming the broader market.

Important Disclosure

This article is based entirely on OCBC Investment Research’s analysis and does not constitute investment advice. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions.