Wall Street banks may be on the cusp of a massive windfall as the U.S. Federal Reserve proposes a major revision to capital rules. Analysts estimate the change could unlock as much as US$6 trillion in balance sheet capacity and free up hundreds of billions in capital for large global banks.
The Fed’s new proposal, announced June 26, targets the enhanced supplementary leverage ratio (eSLR) — a rule that requires banks to hold capital equally against all assets, including low-risk U.S. Treasuries. Critics have long argued this dampens banks’ willingness to support Treasury markets.
Market reaction was swift:
JPMorgan Chase (+1.3%)
Goldman Sachs (+1.6%)
Morgan Stanley (+1.2%)
Bank of America (+1%)
Citigroup (+1.5%)
S&P 500 Banks Index rose 1.4%
Goldman Sachs estimates the rule change could release up to US$5.5 trillion in balance sheet space, while Morgan Stanley sees US$185 billion in capital freed for banks under its coverage. Barclays called the move a “necessary fix” to outdated post-crisis regulations that have since become a drag on low-risk lending.
This reform marks the first major deregulatory move under Fed Vice Chair Michelle Bowman and could enhance banks’ flexibility in lending, trading, and Treasury market participation — with more potential reforms to come.
📊 Singapore Stocks Set to Shine — Maybank Lifts STI Target to All-Time High of 4185
SGX:ES3.SI:Straits Times Index (STI)
Maybank Securities analysts Thilan Wickramasinghe and Toh Xuan Hao believe Singapore is primed for capital inflows, raising their STI end-2025 target to 4185 — an all-time high.
5 Catalysts Driving Optimism:
Domestic Resilience:
Despite U.S. tariff risk, Singapore’s effective rate may stay low at 5.1%. A $14.3B fiscal surplus and more reserves offer room for stimulus by 3Q2025.
China Spill-Over Gains:
China’s GDP upgrade (to 4.6% for 2025) could benefit Singapore firms, as two-thirds of large SGX corporates derive significant China revenue.
Capital Returns Rising:
Mid-caps hold 10% of assets in cash. Dividends are expected to grow 8% CAGR (2025–2027). Share buybacks are at a decade high, boosting EPS.
JS-SEZ Synergy:
The Johor-Singapore Special Economic Zone is expected to drive FDI, improve supply chain resilience, and unlock value across industrial and logistics sectors.
AI Productivity Boom:
Singapore’s AI-first strategy, started in 2019, is already paying off in banking. Broader AI adoption is expected to cut costs and create new revenue streams.
Sector Outlook:
Positive: Industrials, internet, gaming, mid-caps, telecoms, REITs, transport, property
Neutral: Banks, healthcare, plantations
Negative: Tech manufacturing (due to external risk)
Risks:
Trump-era trade war revival
New tariffs on pharma/semiconductors
Geopolitical disruptions triggering inflation
Despite these risks, analysts believe Singapore’s stability, policy clarity, and strong balance sheets will continue to draw yield-focused global capital.
🏗️ Boustead Singapore Soars 20% — OCBC Says More Upside Ahead Amid REIT Buzz
SGX:F9D.SI:Boustead Singapore
Boustead Singapore has surged 20% in under a month, driven by strong FY2025 earnings and strategic moves to unlock value — including a potential REIT injection of its logistics and industrial real estate assets.
OCBC Investment Research’s Ada Lim remains bullish, raising her fair value target from $1.46 to $1.63, citing margin expansion, disciplined cost controls, and a $29 million gain from transferring its fund/property management arm to Unified Industrial.
Boustead’s FY2025 dividend yield of 5.5% and growing investor interest in small-to-mid caps (spurred by MAS’s expected $5B liquidity boost) add to the appeal.
Lim is also optimistic about Boustead’s long-term trajectory, anchored by exposure to secular trends:
Energy Engineering (low-carbon tech)
Real Estate (green industrial buildings)
Geospatial (smart city infrastructure)
The company’s engineering order backlog rose to $349M, up from $247M a year ago. Lim trimmed the conglomerate discount from 15% to 5%, expecting a re-rating as strategic reviews progress.
🏘️ LHN Group’s Co-Living Surge: DBS Sees 80% Upside from Coliwoo Spin-Off
SGX:41O.SI:LHN Group
DBS Group Research spotlighted LHN Group as the market leader in Singapore’s booming co-living sector, driven by its fast-growing Coliwoo brand, which now commands 25% of the market.
Coliwoo has over 2,500 keys in Singapore and 300 overseas, with plans to add 800 more keys annually. LHN’s core space optimisation business — including Work + Store and facilities management — makes up 99% of group revenue.
DBS values Coliwoo between $187M and $246M, translating to $0.45–$0.60 per share, and pegs LHN’s overall fair value at $0.81 per share. The analysts see significant upside from LHN’s plan to spin off Coliwoo while retaining control.
LHN previously spun off LHN Logistics in 2022, which was later privatised by Shanghai-listed Milky Way Chemical in 2024 — a blueprint investors hope to see repeated.
🏥 Raffles Medical: Defensive Powerhouse with Rising Growth in China and Vietnam
SGX:BSL.SI:Raffles Medical Group
In a world of market volatility, Raffles Medical Group (RMG) continues to shine as a defensive healthcare play with strong fundamentals and international expansion.
Its integrated model — from general clinics to hospitals — and its $200M health insurance arm give it a competitive edge. RMG also partners with 100+ global insurers, including AIA, and employs its own medical staff for quality control and shareholder alignment.
International Growth Story
RMG runs hospitals in Beijing, Shanghai, and Chongqing, targeting China’s high-income segment. Strategic tie-ups with Renji Hospital (Shanghai) and the First Affiliated Hospital of Chongqing strengthen its cross-border medical ecosystem.
In Vietnam, RMG acquired American International Hospital (AIH) in Ho Chi Minh City for US$45.6M, with performance already improving under its leadership.
Solid Financials and Payouts
FY2024 earnings: $62.2M (down due to lower grants and property revaluation)
Revenue: $751.6M (+6.3% y-o-y)
Operating cash flow: $86.3M
Cash holdings: $343.7M
Final dividend raised to 2.5 cents, plus a 100M share buyback plan
Maybank upgraded its TP to $1.13, calling RMG its top pick in Singapore healthcare, while RHB maintained a “buy” at $1.08, citing China growth momentum and margin upside.
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