Lim & Tan Securities
Date of Report: 4 August 2025

Singapore Market Outlook: OCBC’s Challenging Half, Dezign Format’s IPO, and Key Sector Flows

Lim & Tan Securities presents an in-depth review of Singapore’s financial markets as of August 2025, highlighting major corporate results, upcoming IPOs, sector fund flows, and key dividend events. This comprehensive update is designed for investors, analysts, and market watchers eager to stay ahead in the rapidly evolving Singapore equity landscape.

Singapore Market Summary and Major Indices Performance

The Singapore market saw cautious trading with the FSSTI dipping 0.5% day-on-day but maintaining a healthy year-to-date gain of 9.7%. Global market sentiment was negatively impacted by weak US jobs data, prompting broad-based declines across major indices. Notably, the HSI recorded a robust 22.2% YTD gain despite recent pullbacks.

Key Interest Rates and Commodities Snapshot

• 3M SGD SORA: 1.8% (YTD: -39.9%)
• SG 10YR Bond Yield: 2.1% (YTD: -26.0%)
• US 10YR Bond Yield: 4.2% (YTD: -7.7%)

• Gold: S\$3,358.6 (+28.0% YTD)
• Crude Oil: S\$67.3 (-6.1% YTD)
• Baltic Dry Index: 2,018.0 (+102.4% YTD)
• Crude Palm Oil: S\$4,245.0 (+3.8% YTD)

OCBC Bank: 1H2025 Performance and Outlook

Stock Price: S\$16.79 (down 0.05)

OCBC delivered a resilient yet slightly underwhelming 1H25 performance, with group net profit at S\$3.70 billion, 6% below the S\$3.93 billion a year earlier. The bank faced a more challenging interest rate environment, resulting in a 5% fall in net interest income to S\$4.63 billion, as the compression in net interest margin (NIM) offset an 8% rise in average asset volume.

• NIM: Declined by 25 basis points year-on-year to 1.98% due to lower asset yields outpacing funding cost reductions.
• 2Q25 Net Profit: S\$1.82 billion, 4% below the prior quarter.
• 2Q25 NIM: Further contraction to 1.92% (down 12 bps QoQ), impacted by downward repricing of SGD and HKD denominated loans, and strategic liquidity deployment into high-quality, lower-yielding assets.
• Non-Interest Income: Dropped 4% to S\$1.26 billion, mainly on weaker insurance and trading income, partially offset by higher fees and gains from investment securities sales.
• Dividend: Interim dividend of 41 cents per share (flat HoH, -7% YoY), representing a payout ratio of 50% and amounting to S\$1.84 billion.

Management Commentary: Outgoing CEO Helen Wong highlighted OCBC’s robust balance sheet, strong capital position, and continued expansion of the loan book and fee income. The bank reaffirmed its commitment to a comprehensive capital return plan, including increased economic interests in Great Eastern Holdings (GEH) and share buybacks.

Outlook and Recommendation: – OCBC has formalized a 50% dividend payout ratio and plans an additional 10% special dividend for FY25, totaling a 60% payout. – S\$2.5 billion in share buybacks planned until FY26. – However, core net interest margin and income are expected to slip below management’s prior guidance due to global growth headwinds and likely further interest rate cuts. – With only 4% upside to consensus target price and a challenging 2H’25 expected, the recommendation is downgraded to HOLD/NEUTRAL, though yield (5%-6%) and buybacks provide some support.

Dezign Format Group: IPO on SGX Catalist Board

IPO Details: – Listing Date: 15 August 2025 – Offer Size: 32.5 million placement shares at S\$0.20 each – Gross Proceeds: S\$6.5 million – Market Cap (Post-IPO): S\$40 million – Historical P/E: 8x – Dividend Policy: At least 30% payout from FY25 and FY26 profits

Founded in 1988, Dezign Format has grown from a family-run subcontractor to a leader in design-and-build services across events, exhibitions, and the MICE (Meetings, Incentives, Conferences, Exhibitions) sector. The company’s highlights include iconic projects for Marina Bay Sands, Cartier, and the LKY: The Experience exhibition.

• Revenue Growth: S\$18.3 million (FY22) → S\$26 million (FY23) → S\$33.4 million (FY24)
• Business Segments: Events/exhibitions/decor, commercial/retail fit-out, immersive entertainment
• Growth Drivers: Regional expansion, scaling up location-based entertainment, M&A, automation investment
• Malaysian Expansion: Acquired facilities in Johor Special Economic Zone to boost production by 4Q25
• Staff Strength: 166 employees, diverse talent pool

IPO proceeds will fund new content development, licensing, M&A, and automation. The IPO is positioned as a springboard for the company’s next phase, not an endpoint.

Sector and Stock Insights: Highest Yields and Value Picks

China and Hong Kong: Coal Imports and Emerging Market Strategy

China’s coal imports plummeted 26% YoY in June to 33 million tonnes, with Indonesian shipments down 30% as Chinese utilities shift away from lower-quality fuel amid oversupply and falling domestic prices. Steelmaking coal imports were also down 7.7% YoY but up 23% month-on-month, benefiting suppliers like Mongolia and Canada as Australian shipments faced disruptions.

BCA Research recommends selling the US dollar on rebounds, highlighting that weaker global trade flows and a depreciating dollar now have deflationary implications for the rest of the world. Institutional strategy remains neutral on EM equities, constructive on EM local bonds, and overweight global bond duration.

SGX Watch-List: Companies Under Scrutiny

A total of 32 companies are currently on the SGX watch-list, including latest additions such as Addvalue Technologies, Renaissance United, Telechoice, and Keong Hong. These companies face heightened regulatory scrutiny due to financial or operational issues.

Share Transactions and Buybacks: July 2025 Activity

Institutional and Retail Fund Flows: Sector Trends (Week of 21 July 2025)

Institutional investors recorded a strong net buy of S\$335.4m (up from S\$122.3m the prior week), while retail investors were net sellers at -S\$159.6m (improved from -S\$371.1m). The most notable institutional sector inflows were in Financial Services, Industrials, and Consumer Cyclicals.

STI Constituents: Institutional and Retail Flows

Key takeaways include institutional net buying in Singtel, Keppel, SIA, and OCBC, while retail investors were net sellers of major banks and airlines, reflecting divergent sentiment between institutional and retail participants.

Upcoming Dividends and Special Distributions

Key Events on the Singapore Market Calendar

• 7 Aug: UOB, DBS, Genting, IREIT Global, Singland, Frasers Property, Centurion, BHG Retail REIT
• 8 Aug: Sembcorp Industries, SGX, Daiwa House, IFS Capital, Hong Leong Fin, APAC
• 13 Aug: City Developments, Thakral, Stoneweg EREIT, China Sunsine, CSE Global, EC World, Nanofilm, CNMC
• 14 Aug: Manulife US REIT, Sasseur, Capland Invest, ST Engineering, Mewah, LHT, Hobee Land, Global Inv, mDR Ltd, Golden Agri

Conclusion

The Singapore financial markets continue to offer a mix of opportunity and challenge. OCBC’s capital management and cash returns provide some support, but earnings pressure looms. Dezign Format’s IPO introduces a new growth story in the design and MICE space. Sector flows, buybacks, and dividend events offer tactical opportunities, while the fund flow data reveals strong institutional conviction despite retail outflows. Investors should remain vigilant as global macro headwinds and shifting interest rate expectations continue to shape the outlook for 2H2025.