OCBC Investment Research
8 July 2025

Global Markets Rattled by Fresh Tariff Threats: Key Equity Insights & Singapore’s Market Leaders

Global Market Overview: Tariff Fears Trigger Volatility

Global markets faced a resurgence of volatility as President Donald Trump announced a new wave of tariff threats, targeting not only BRICS nations but also Japan, South Korea, South Africa, and Myanmar. These announcements led to a broad selloff in US equities and rippled across Europe and Asia.

• US Markets: The Dow Jones Industrial Average plunged 422.17 points (-0.94%), the S&P 500 fell 0.79%, and the Nasdaq Composite dropped 0.92%. Nine out of the S&P 500’s 11 sectors declined, with consumer discretionary and energy leading the losses. Defensive sectors such as utilities and consumer staples offered slight gains.
• Bond Yields: The 2-year Treasury note yield rose to 3.9%, while the 10-year yield climbed to 4.39% as inflation worries mounted.
• Tariff Announcements: Trump’s latest threats include 25% tariffs on Japan and South Korea and higher rates (up to 40%) on South Africa and Myanmar, effective 1 August if no agreement is reached. Major Japanese automakers felt the impact, with Toyota Motor shares down 4% and Honda Motor off 3.9%.
• Policy Uncertainty: The tariff measures have complicated the Federal Reserve’s path to lower rates, with inflation concerns growing. The Fed’s June meeting minutes, due for release soon, are expected to shed light on future policy moves. Meanwhile, Trump’s recently signed tax-cut and spending plans are projected to increase the national deficit by over US\$3 trillion in the next decade.

European Markets: Sector Rotation Amid Uncertainty

• Stoxx Europe 600: The index gained 0.44%, with technology and banking stocks offsetting the drag from energy. Societe Generale SA advanced 2.8%, buoyed by positive analyst sentiment.
• Energy Sector: Shell Plc weighed on the sector after issuing a weaker-than-expected trading update.
• Medtech & Trade Tensions: Medtech stocks pared early losses, but China’s retaliation against EU medical device restrictions added uncertainty ahead of a pivotal summit.

Asia-Pacific Markets: Trade Tensions Hit Benchmarks

• MSCI Asia Pacific Index: Fell as much as 0.8%, its sharpest drop in two weeks, with Taiwan and Japan underperforming.
• US Chip Export Restrictions: Stocks in Malaysia and Thailand dropped after news of potential US restrictions on AI chip shipments to these countries.
• China Relations: While US-China relations remain stable, with diplomatic meetings expected, regional trade anxiety persists.

Singapore Market Snapshot

Market turnover was stable at SGD 1,159.9 million, with a slight dip in trading volume. The 52-week range for the Straits Times Index was 3,198.4 to 4,031.9, with gainers and losers nearly balanced at 249 and 256, respectively.

Key World Indices

FX & Commodities

Company Focus: Nanofilm Technologies International Ltd (NANO SP)

Acquisition of Sydrogen: Strategic Expansion

Nanofilm Technologies International Ltd announced plans to acquire the remaining 35% stake in Sydrogen from Temasek’s Venezio Investments for SGD 15 million. The purchase will occur in two tranches: 16.3 million shares by 30 November 2025 and 32.7 million shares by 30 November 2026. This will give Nanofilm full ownership of Sydrogen, funded entirely through internal resources.

• On a pro forma basis, this acquisition would have reduced Nanofilm’s FY24 EPS by 16.9% to 0.98 Singapore cents.
• Shareholder approval will be sought at an extraordinary general meeting.

Tariff Outlook: Cautious Optimism

Tariff uncertainty remains, despite a recent “Great Deal of Cooperation” between the US and Vietnam. The US lowered its reciprocal tariff rate from 46% to 20% (with 40% on goods considered transshipment). Nanofilm’s exposure to Vietnamese tariffs is expected to be indirect, through its Advanced Materials and Nanofabrication Business Units.

Revenue forecasts have been nudged up slightly ahead of 1H25 results, anticipating a recovery backloaded into FY26. The fair value estimate has been raised from SGD 0.595 to SGD 0.610, but the HOLD rating is reiterated, reflecting persistent macroeconomic uncertainty.

ESG & Sustainability Initiatives

• Nanofilm is investing in hydrogen economy solutions, supporting the transition to a low carbon economy.
• Operational targets include reducing GHG intensity by 40% and production wastewater discharge intensity by 80% by 2030. The company already surpassed its 2030 target of sourcing at least 50% of total energy use from renewables or carbon credits as of FY23.
• 100% of critical direct suppliers have undergone human rights, environmental, and health and safety due diligence.
• However, employee training averaged just 14 hours per person in FY24 (down from 31 in FY22 and 21 in FY23), short of the 2030 target of 40 hours. Board and senior management diversity remains limited, with 80% male representation in FY24.

Recommendation: HOLD (Fair Value: SGD 0.610)

Recent Research Highlights: Notable Companies and Sectors

Singapore’s Largest STI Stocks: Market Leaders at a Glance

Other notable STI stocks include CapitaLand Integrated Commercial Trust, Keppel Ltd, CapitaLand Investment Ltd, Sembcorp Industries Ltd, CapitaLand Ascendas REIT, Thai Beverage PCL, Genting Singapore Ltd, Yangzijiang Shipbuilding Holdings Ltd, Seatrium Ltd, Mapletree Pan Asia Commercial Trust, Mapletree Logistics Trust, Mapletree Industrial Trust, UOL Group Ltd, DFI Retail Group Holdings Ltd, Keppel DC REIT, City Developments Ltd, SATS Ltd, Frasers Centrepoint Trust, Venture Corp Ltd, and Frasers Logistics & Commercial Trust. These leaders offer a mix of yield, growth, and defensive characteristics, making them central to Singapore’s market landscape.

Conclusion: Navigating Uncertainty with Cautious Optimism

Markets remain on edge as geopolitical risks and trade tensions mount, with tariff threats casting a shadow over the near-term outlook. However, select sectors—particularly financials, technology, and defensive plays—are showing resilience. In Singapore, blue-chip stocks continue to anchor portfolios, while ongoing research highlights opportunities in yield, sustainable growth, and strategic sector plays.