OCBC Investment Research
Date of Report: 23 June 2025

Global Markets Roiled by Geopolitical Tensions: Key Stock Picks and Market Insights for Investors

Market Overview: Volatility Returns Amid Geopolitical Escalation

The past week witnessed significant volatility across global markets as fresh geopolitical and trade tensions rattled investor sentiment. The US stock market ended the week with a dip, as the S&P 500 slipped 0.22%, the Nasdaq Composite shed 0.51%, and the Dow Jones Industrial Average managed a modest gain of 0.08%. While optimism initially surfaced on dovish remarks from Fed Governor Christopher Waller regarding a potential rate cut as soon as next month, concerns over the semiconductor sector and renewed Middle East tensions quickly overshadowed any positive momentum.
A major jolt came over the weekend as the US launched strikes on Iran’s nuclear facilities, sharply escalating regional risks. This move pushed oil prices up to around US$76.70 a barrel and strengthened the US dollar in early trading. With President Donald Trump warning of further action should diplomacy stall, global markets are bracing for Iran’s response. Notably, there are reports that Iran may consider closing the Strait of Hormuz—a vital energy shipping route that handles about 20% of global oil supply. Such a move could trigger a sharp spike in oil prices and potentially tip the global economy into stagflation and even recession. The situation has also exposed divisions among Trump’s supporters, with some viewing the attack as a show of strength and others urging restraint.

Regional Market Performance

• Europe: The Stoxx Europe 600 Index edged up 0.1%, breaking a three-day losing streak, with insurers and travel/leisure stocks leading gains. However, the benchmark remains down for June, with energy stocks outperforming thanks to higher oil prices.
• Asia: The MSCI Asia Pacific Index advanced 0.4%. South Korea’s Kospi surpassed the 3,000 mark for the first time since December 2021, and Hong Kong stocks rallied 1.4%. Japanese and Australian markets declined. Despite the weekly loss for the MSCI Asia benchmark, hope remains cautious as investors closely monitor the impact of Middle East tensions on oil prices.

Singapore Market Snapshot

• Volume: 1,298.1 million shares (+32.3%)
• Turnover: 2,165.9 million SGD
• 52-week Range: 3,198.4 – 4,005.2
• Gainers/Losers: 258 / 200

World Indices Performance

FX & Commodities

• USDSGD: 1.2870 (unchanged)
• USDJPY: 146.09 (-0.4%)
• USDCNY: 7.182 (+0.1%)
• USDHKD: 7.850 (unchanged)
• WTI Crude: USD 73.84/bbl (-1.7%)
• Brent: USD 77.01/bbl (-2.3%)
• Gold: USD 3,368.4/oz (-0.1%)
• Silver: USD 36.01/oz (-1.0%)

In-Depth Equity Research: Top Stock Ideas and Sector Insights

BYD Co Ltd (1211 HK / 002594 CH): Riding High on Overseas Expansion and Innovation

• Stellar Stock Performance: BYD-H has delivered a remarkable 42% total return year-to-date (YTD), far outpacing the Hang Seng Index’s 18%, BYD-A’s 20%, and the CSI 300 Index’s flat showing. Over the last 12 months, BYD-H achieved a 62% total return, while BYD-A marked 35%.
• Impact of Price Cuts: Recent price reductions in May, described by management as a marketing promotion and defensive maneuver, are not expected to significantly dent average selling prices (ASP)—the estimated impact is no more than CNY5,000, representing about 4-5% of 2024 ASP.
• Unmatched Innovation: BYD’s edge stems from its relentless focus on innovation. As of end-2024, BYD employed nearly 1 million people, with 11 major research institutes and 110,000 engineers, making it the automaker with the world’s largest R&D workforce. The company’s patent portfolio, particularly in batteries, outstrips competitors, and it manufactures its own battery packs in-house.
• Global Ambitions: BYD targets 800,000 overseas vehicle sales in 2025, with actual performance already surpassing targets at the current run-rate. Europe is experiencing robust growth, especially due to a low base and swift operational adjustments. Key initiatives include:
  • Stepped-up marketing in non-EU countries (e.g., UK)
  • Introduction of plug-in hybrid electric vehicles (PHEVs) to EU markets less impacted by tariffs
  • Plans to eventually move to local manufacturing in Europe
• Production Expansion: The Brazil plant, with 150,000 units annual capacity, is on track to begin operations by end-2025.
• Strong Positioning: BYD is well-placed for continued growth thanks to its technological and cost competitiveness, as well as its comprehensive offerings across battery electric vehicles (BEVs) and PHEVs.
• Valuation Update: The fair value estimate has been adjusted to HKD180 (1211 HK) / CNY500 (002594 CH).

ESG Highlights:

• BYD leads the industry in mitigating tailpipe greenhouse gas emissions, having ceased production of non-electrified vehicles since March 2022 and selling only NEVs in 2023.
• The company’s NEVs, batteries, and energy storage systems are well-positioned to capture rising demand for clean energy.
• However, BYD lags global peers in business ethics.

Recommendation: BUY

Sheng Siong Group (SSG SP): A Defensive Play Amid Retail Shifts

• Resilient Performance: Supermarket and hypermarket sales in Singapore rose 1.7% YoY in April 2025, reflecting stable demand for essential goods. Overall retail sales grew 0.3% YoY, with key categories such as Computer & Telecommunications Equipment and Watches & Jewellery leading the pack.
• Store Expansion: Sheng Siong’s share price has climbed 15% YTD, outperforming the STI’s 3%. SSG opened two new stores in Q1 2025 and secured six more locations, with four additional sites under tender. Notably, four of the six new stores were previously operated by competitors, highlighting SSG’s ability to capitalize on market rationalization.
• Growth Outlook: The company is on track to open at least eight new stores this year, up from its previous target of three per year. These locations will begin operations from May through Q3 2025.
• Supply Chain Resilience: The impact from global trade disruptions is expected to be minimal, as most procurement is sourced within Asia. The primary challenge has been changes in shipping routes affecting container availability.
• Favorable Consumer Trends: In a softer macro environment, SSG is poised to benefit from consumers’ increasing focus on value-for-money, potentially accelerating market share gains.
• Valuation Update: Growth and margin estimates have been revised up, raising the fair value estimate from SGD1.88 to SGD1.99.

ESG Highlights:

• Labour management practices are in line with peers but lack annual employee surveys and training support.
• SSG leads peers in data security management, but lags in environmental initiatives, with limited evidence of sustainable sourcing or supplier carbon/energy data requirements.

Recommendation: HOLD

Other Noteworthy Stock Coverage and Recommendations

Below is a summary table of the top STI component stocks sorted by market capitalization, including their latest price, market cap, dividend yield, P/E ratios, and recommendations:

Conclusion: Navigating Uncertainty with Focused Stock Picks

The week’s events underscore the fragile balance in global markets, with geopolitics, energy prices, and shifting consumer trends shaping investment decisions. OCBC Investment Research’s latest analysis identifies BYD as a high-growth, innovation-led leader in clean mobility, while Sheng Siong Group stands out for its defensive qualities and expansion momentum in Singapore’s resilient grocery sector. Amid ongoing trade and geopolitical risks, a thoughtful blend of growth and defensive equities remains essential for navigating market uncertainty.
Note: For full disclosures, risk warnings, and detailed analyst recommendations, please consult the original report from OCBC Investment Research.