Broker Name: Lim & Tan Securities
Date of Report: 23 July 2025

Singapore Market Update: STI Performance, Key Company Moves, and Institutional Trends for July 2025

Market Overview: Record Highs Amid Mixed Global Sentiment

The Straits Times Index (FSSTI) closed at 4,208.3, maintaining its position at the upper end of its 52-week range with a year-to-date gain of 11.1%. Despite flat daily performance, the STI has outperformed several regional peers, buoyed by robust institutional flows and a series of corporate actions.

Daily market value traded stood at S\$1,325.6 million, with volumes at 1,355.3 million shares. The index remains near its 52-week high of 4,225.8.

US and Global Macro Backdrop

U.S. stocks ended mixed as investors absorbed another round of earnings and trade developments. The Dow Jones rose 0.4% to 44,502.44, S&P 500 inched up 0.06% for another record close, while the NASDAQ fell 0.39% due to losses in major technology names. Nine of the 11 S&P 500 sectors ended higher, with health care and real estate leading the way. Technology and communication services underperformed.

Commodities and Interest Rates

• Gold: S\$3,430.8 (+30.7% YTD)
• Crude Oil: S\$66.2 (-7.7% YTD)
• Baltic Dry Index: 2,016.0 (+102.2% YTD)
• Crude Palm Oil: 4,252.0 (+4.0% YTD)

• 3M SGD SORA: 1.9% (-38.8% YTD)
• SG 10YR Bond Yield: 2.1% (-27.0% YTD)
• US 10YR Bond Yield: 4.4% (-4.7% YTD)

Idea of the Day: Singapore Post Limited – Major Divestment and Special Dividend Potential

Singapore Post Limited (SingPost, \$0.64, down 0.5 cent) announced the divestment of its entire freight forwarding business, conducted via Famous Holdings Pte Ltd (FHPL) and Rotterdam Harbour Holding B.V. (RHH), for a total of approximately S\$177.9 million. The strategic move aligns with SingPost’s March 2024 plan to divest non-core assets and recycle capital.

Key transaction details:

• Estimated gain on disposal: S\$10.5 million
• Cash released: About S\$104.0 million
• Sale split between DP World Logistics FZE (US\$97.7 million, S\$125.5 million) and a consortium of Famous Holdings’ minority shareholders (€35.7 million, S\$52.4 million)

Ernst & Young Corporate Finance Pte Ltd managed the sale, soliciting interest from multiple parties to maximize valuation. The divestment follows SingPost’s earlier sale of its Australia logistics business, Freight Management Holdings, in March 2025.

For the 12 months ending 31 March 2025:

• Net asset value for FHPL (including RHH): S\$176.0 million
• Net profit before tax and non-controlling interests: S\$14.5 million
• RHH specifically: NAV S\$30.0 million, net profit before tax S\$15.9 million

While the upside to consensus target price is modest, ongoing and upcoming disposals of non-core assets could signal additional special dividends as the group gradually winds down operations. SingPost is maintained at HOLD, with focus on potential special distributions from future asset sales.

Other Company Highlights: Hutchison Port Holdings Trust

Hutchison Port Holdings Trust (HPH Trust, US\$0.184, up 0.1 cent) reported a 6.3% year-on-year increase in revenue and other income for 1H24, reaching HK\$5,653.6 million. Key segment developments:

• HPHT Kwai Tsing (HIT, COSCO-HIT, ACT): Combined container throughput fell 3.3% in 2025 due to lower empty and transshipment cargoes.
• YICT: Container throughput surged 12.7% year-on-year, driven by higher exports, inbound empties, and transshipments.
• Average revenue per TEU: Up in Hong Kong (higher storage income), down in China (higher portion of empty/transshipment cargoes).

Management commentary highlighted the impact of US-China tariff fluctuations, with exports to the US dropping sharply before a temporary 90-day pause in mutual tariffs. China-EU exports rose 13% YOY in Q2 2025, though EU port congestion may pressure future volumes. HPH Trust maintains 50% of debts on fixed rates, and with the recent sharp drop in HIBOR, interest costs may rise upon refinancing in 2026.

HPH Trust is rated HOLD for its attractive yield, though further price upside appears limited.

FSSTI Universe: Highest Yields and Lowest Valuations

Convertible Bonds in China: Scarcity Drives Premiums

Convertible bonds have emerged as a standout asset class in China for 2025, with the CSI Convertible Bond Index rallying about 8% year-to-date, outperforming local equities and government bonds. Key drivers include:

• Easing credit risks and equity market rebound
• Bank convertibles favored for low volatility, strong ratings, and liquidity
• Outstanding supply fell below 650 billion yuan amid early redemptions and maturities
• CSI 300 Bank Index has gained 17% YTD
• No new bank convertibles since late 2022, adding to scarcity premium

Market strategists advise convertible bond investors to consider locking in profits amid ongoing tariff and earnings uncertainties, but note that tight supply continues to support valuations.

Macro Market Strategy: Global Asset Allocation and Sector Shifts

BCA Research’s global asset allocation team expects lower interest rates to revive the sluggish US economy, with upgrades to duration and equities and a reduction in cash allocations. Japanese equities are upgraded to overweight, while Australian equities move to underweight. The US remains in a weak expansion phase, with consumer spending showing signs of strain and US equities trading above fair value. In China and Hong Kong, convertible bonds are now a leading asset class, driven by banking and small-cap share rallies.

Major Share Transactions: Acquisitions, Disposals, and Buybacks

Significant disposals included AIMS APAC REIT (by ESR), NSL Ltd (by YTL Cement), and Eneco Energy Ltd (by Unionsteel Holdings Ltd).

Notable buybacks were registered in HK Land, UOB, DBS, ST Engineering, Olam, and others, indicating active capital management strategies.

Institutional and Retail Fund Flows: Sector and Stock Highlights

During the week of 7 July 2025:

• Institutional investors were net buyers (+S\$87.3m), down from +S\$213.3m a week earlier.
• Retail investors were net sellers (-S\$325.5m), compared to -S\$304.7m the prior week.

Dividends and Special Distributions Calendar

Key Watch-List Companies on the SGX

The SGX Watch-List includes 32 companies—among them Amos Group, ASTI Holdings, Cosmosteel, Interra Resources, Manufacturing Integration Technology, Global Invacom Group, and others—subject to ongoing review and compliance monitoring.

What’s Ahead: Earnings and Ex-Dividend Dates

A busy calendar of earnings and ex-dividend dates is set for late July and August, including major names such as Aztech, Hutchison Port, Digital Core REIT, Suntec REIT, Frasers Centrepoint Trust, Keppel DC REIT, SIA, UOB, Wilmar, CapitaLand, ST Engineering, and more. Investors should watch for potential volatility and trading opportunities as results are released.

Conclusion: Navigating Opportunities and Risks in the Singapore Market

The Singapore equity market continues to demonstrate resilience, supported by sectoral rotations, special corporate actions, and robust institutional participation. With ongoing asset disposals at SingPost and attractive yields at HPH Trust, coupled with tight supply in Chinese convertibles, investors have a range of opportunities to consider. However, macroeconomic uncertainties, trade negotiations, and sector-specific risks warrant vigilant portfolio management.