OCBC Investment Research
Date of Report: 1 August 2025

Global Markets Recoil Amid Tariff Tensions: In-Depth Equity Analysis and Top Singapore Stock Picks

Market Overview: Volatility Returns as Global Uncertainties Intensify

The week leading up to August 2025 saw a notable shift in investor sentiment across major global markets. Despite strong tech earnings, heightened anxieties ahead of President Donald Trump’s tariff deadline, regulatory demands on drugmakers, and a spike in inflation metrics led to widespread selloffs in US and European equities. Asian markets followed suit, with only selective pockets of resilience. This article provides a comprehensive breakdown of the latest equity research, covering market performance and in-depth stock analysis of leading Singapore-listed firms.

United States: Tech Resilience Offset by Tariff Fears and Inflation

• The Dow Jones Industrial Average slid 330.30 points (-0.74%), S&P 500 lost 0.37%, and Nasdaq was nearly flat after surrendering earlier gains.
• Trump’s aggressive moves, including letters sent to 17 major pharmaceutical firms demanding price cuts and a slew of tariff announcements (notably on India and copper), reignited regulatory and trade uncertainty.
• The Federal Reserve’s preferred inflation gauge, the core personal consumption expenditures (PCE) price index, rose 0.3% from May and 2.8% year-on-year, higher than previous readings.
• US GDP growth outperformed expectations, adding to speculation about possible central bank rate moves.

Europe: Cautious Gains Erode as Tariff Impact Hits Autos and Miners

• The Stoxx Europe 600 Index fell 0.8%, with automakers and mining stocks under pressure from new US tariffs, especially on copper.
• Ferrari NV plummeted 12% after reporting weaker luxury car demand.
• Despite July gains (+0.9%), the index faces historical seasonal headwinds in August and September.

Asia: Mixed Market Sentiment Amid Policy Holds and Weak Data

• Asia-Pacific equities, as measured by the MSCI Asia Pacific Index, declined 0.4%.
• Tokyo’s Nikkei 225 bucked the trend with a 1% gain after the Bank of Japan left rates unchanged.
• Hong Kong and China indices dropped over 1% on disappointing economic data and muted outcomes from government meetings.
• Despite volatility, the MSCI Asia Pacific Index posted its fourth straight monthly gain (+1.2% in July), supported by renewed AI-driven optimism.

Singapore Market Snapshot: Broad-Based Declines

• Trading volumes and turnover were down 10.4% and 8.9%, respectively.
• Gainers numbered 206, while losers totaled 387.

Global Indices & Commodities: Key Figures

Company Coverage: Research Highlights and Stock Analysis

Seatrium Limited (STM SP): Operational Cleanup and Margin Expansion

• 1H25 Revenue: Up 34% YoY to SGD5.4 billion, driven by strong project execution, especially in offshore platforms.
• Gross Profit Margin: Surged to 7.4% (FY24: 3.1%), exceeding expectations. Gross profit more than doubled to SGD395 million.
• Net Profit: Tripled to SGD144 million, aided by a SGD14 million reversal of excess provisions after resolving Operation Car Wash legal matters.
• Order Book: SGD18.6 billion as of 30 June 2025, covering 25 projects until 2031.
• Legal Resolution: Final settlements with Brazilian and Singaporean authorities have removed a major overhang, with total penalties well provisioned for.
• ESG Update: Upgraded in March 2023. Seatrium leads in corporate governance and matches industry peers in labor management and safety. Board remains majority independent despite government representation.
• Fair Value Estimate: SGD2.76 (FY25E P/B: 1.4x). Rating: BUY

CapitaLand India Trust (CLINT SP): Strong Distribution and Green Leadership

• 1H25 DPU: 3.97 Singapore cents (+9.1% YoY), exceeding expectations and representing 55.7% of full-year forecast. Annualized yield at 6.8% (last close: SGD1.17).
• Property Income/NPI: Up 10% YoY, supported by higher rentals from existing and new developments. Income to be distributed up 10% to SGD53.6 million.
• Occupancy: Stable at 92%, with rental reversions averaging +9% (Pune at -3% due to rent-free large leases).
• Gearing: 42.3% (pro forma 40.1% post-perpetual securities issuance). Average cost of debt lowered to 5.9%, with 77.2% on fixed rates.
• Divestment Update: CyberPearl and CyberVale sale delayed, but management aims to close by year-end. A 33% data centre stake divestment remains on track.
• Repo Rate Impact: Positive outlook on asset valuations following India’s 50bps rate cut to 5.5%.
• ESG Update: Maintained rating. 79.5% of portfolio certified to green building standards (industry average: 47%). Outperforms peers in staff management and grievance mechanisms.
• Fair Value Estimate: Raised to SGD1.44 (from SGD1.23). Rating: BUY

Mapletree Pan Asia Commercial Trust (MPACT SP): VivoCity Outperforms Amid Mixed Portfolio Results

• 1QFY26 DPU: 2.01 Singapore cents (-3.8% YoY), meeting expectations. DPU covers 24.5% of FY26 forecast.
• Revenue/NPI: Down 7.6%/7.5% YoY, reflecting weaker contributions from overseas assets and Mapletree Anson divestment, partially offset by VivoCity’s robust results.
• Finance Costs: Improved 16.4% YoY thanks to debt repayments from divestment proceeds.
• Occupancy: Slight decline to 89.3% (down 0.3ppt QoQ), mainly due to Japan and “Other SG” segments.
• Rental Reversions: Portfolio average +1.4%, with strong gains at VivoCity (+14.7%) and The Pinnacle Gangnam (+7.9%), but double-digit negatives for China assets (e.g., Festival Walk at -19.4%). Rental softness in China expected to persist for up to two years.
• Leverage: Aggregate ratio up slightly to 37.9% (from 37.7%), with 77.7% of debt hedged. All-in average cost of debt improved to 3.32% (from 3.51%), with further 10bps reduction expected by FY26-end.
• Forecast Update: FY26/FY27 DPU trimmed by 0.5%/1.9% due to weaker HKD/SGD, lower China rates, and reduced occupancy at Sandhill Plaza and MBC, but offset by lower borrowing costs and divestment proceeds.
• ESG Update: Upgraded rating. Board is majority independent and led by an independent chair. Exceeds peers in green certifications, with green lease offerings enhancing sustainability.
• Fair Value Estimate: SGD1.45. Rating: BUY

Latest Equity Ratings and Highlights

STI Stocks by Market Capitalisation: Key Financial Ratios and Recommendations

Conclusion: Navigating a Shifting Global Landscape

As global markets navigate tariff shocks, inflation spikes, and regulatory headwinds, Singapore equities remain a focal point for resilient earnings and robust governance. Top picks such as Seatrium Limited, CapitaLand India Trust, and Mapletree Pan Asia Commercial Trust offer compelling value, backed by strong fundamentals and proactive management. Investors are advised to remain vigilant amid ongoing macroeconomic uncertainties, with a bias toward quality names that demonstrate operational excellence, defensive yields, and sustainability leadership.