OCBC Investment Research
29 July 2025

Global Markets Update: Earnings, Tariffs, and Top Singapore Stocks to Watch in 2025

Market Overview: Mixed Sentiment Ahead of Major Earnings and Economic Events

Investors navigated a complex landscape as anticipation built for a pivotal week of Big Tech earnings, key economic data, and a Federal Reserve meeting. U.S. equity markets ended on a mixed note, with a modest rally in growth stocks. The S&P 500 notched its sixth consecutive record close, and the Nasdaq Composite achieved its fourteenth record high of July. Energy led the session on the back of a more than 2% rally in oil prices, while real estate and materials lagged.

The positive momentum from the recent U.S.-EU tariff agreement faded, but hopes for an extension of the U.S.-China trade truce provided some support. Oil prices saw upward movement after President Trump indicated a shortened timeline for a Russia-Ukraine truce. Meanwhile, the upcoming Personal Consumption Expenditure (PCE) report and government payrolls data are set to reveal the impact of tariffs on consumer prices and the labor market.

Corporate Earnings: Resilience Amidst Tariffs

Despite ongoing trade tensions, corporate America has shown resilience. With a third of S&P 500 companies having reported, about 82% have beaten profit forecasts, signaling the best quarter in four years. Notably, value stocks outperformed growth names this earnings season for the first time since late 2023. The focus now shifts to the remaining reports, including four of the Magnificent Seven.

Europe: Tariff Clarity Fails to Boost Markets

Europe’s Stoxx 600 Index dipped 0.22%, retreating from initial gains following the new tariff agreement. The auto sector, down 2.2% year-to-date, continued to underperform. Although the deal delivered clarity, levies remain higher than pre-Trump levels, sustaining pressure on earnings, especially in pharmaceuticals, aluminum, and steel.

Asia: Mixed Performance, Notable Moves in Tech and Regional Indices

The MSCI Asia Pacific Index fell 0.3%, weighed down by a UBS downgrade of Advantest. Japanese and Indian stocks led regional declines, while Samsung rallied on a \$16.5 billion deal to supply chips for Tesla. Hong Kong, China, Indonesia, and Taiwan equities advanced.

Singapore Market Snapshot

Market turnover and volume saw notable declines, with turnover down 20.8% and volume off by 9.3%. The 52-week range for the Straits Times Index stands at 3,198.4 – 4,274.3, with 298 gainers and 268 losers.

Global Indices and Commodities Performance

Research Focus: Frasers Centrepoint Trust (FCT SP) – Strong Position Despite Lease Hiccups

Frasers Centrepoint Trust (FCT) continues to demonstrate resilience and strong fundamentals, even as it manages challenges such as rental arrears at Cathay Cineplexes.

• Retail Portfolio Occupancy: Committed occupancy improved 0.4 percentage points quarter-on-quarter to 99.9% as of 30 June 2025, excluding Hougang Mall (under asset enhancement). Most malls showed improvement, with NEX maintaining a high 99.9% occupancy despite a slight dip.
• Hougang Mall Enhancement: FCT targets a ~7% ROI on SGD51 million capex, with 74% of space pre-committed and rents slightly above expectations.
• Cathay Cineplexes Issue: Statutory demand served for rental arrears; however, its contribution is under 1% of gross rental income, rendering the impact immaterial. FCT may terminate the lease, depending on alternative tenancy options.
• Shopper and Tenant Metrics: Tenants’ sales up 4.4% and shopper traffic up 2.1% year-on-year for 3QFY25. For 9MFY25, shopper traffic rose 1.3% and tenant sales grew 3.6% y-o-y.
• Rental Reversions: Management expects FY25 rental reversions between 7.7% and 9.0%, in line with previous periods; figures are reported semi-annually.
• Leverage and Capital Management: Aggregate leverage rose from 38.6% to 42.8% due to the Northpoint City South Wing (NPSW) acquisition, completed on 26 May 2025. The issuance of SGD200 million in 3.98% subordinated perpetual securities on 3 July 2025 will reduce leverage to 40.4% on a pro forma basis.
• Debt Hedging and Cost: 76.2% of debt hedged; average debt cost dropped 10 bps to 3.8% (9MFY25), with 3QFY25 cost at 3.7%. FY25 average is expected at 3.8%, trending to mid-3% in FY26.
• DPU Forecasts and Valuation: FY25 DPU forecast lowered by 0.5% (timing of new units vs. NPSW acquisition); FY26 DPU raised by 0.5%. Cost of equity slightly reduced to 6.1%. Fair value estimate increased from SGD2.50 to SGD2.58.
• ESG Initiatives: FCT’s ESG rating was upgraded in June 2024, led by superior talent management, business ethics, and green building efforts. Initiatives include solar panel rollouts and plans for 36 EV charging points, supporting a net-zero carbon goal by 2050. All properties have at least BCA Gold certification, and FCT earned a 5-Star rating in the 2024 GRESB Real Estate Assessment for the fourth consecutive year.

Latest Coverage: Key Companies and Sector Insights

Singapore’s Largest Stocks: Market Capitalisation, Valuation, and Broker Recommendations

The table below highlights the top 30 Straits Times Index (STI) stocks by market capitalisation, valuation metrics, dividend yields, and broker recommendations:

Conclusion: Navigating Uncertainty with Quality Insights

As markets grapple with ongoing macroeconomic uncertainties, tariff adjustments, and evolving sectoral trends, timely research and robust stock selection remain critical. OCBC Investment Research continues to monitor market developments, providing detailed analysis and actionable insights for investors seeking to navigate the shifting investment landscape in Singapore and globally.