Broker: OCBC Investment Research
Date of Report: 18 August 2025

Global Market Pulse: Key Equity Insights & Singapore Blue-Chip Analysis for Investors

Market Overview: US, Europe, and Asia Markets React to Economic and Political Developments

The latest week in global capital markets saw a blend of record highs, cautious pullbacks, and sectoral divergence, reflecting evolving investor sentiment in the US, Europe, and Asia.

United States: Inflation Fears and Geopolitical Tensions Drive Market Sentiment

• US equities retreated modestly from record levels. The S&P 500 ended down 0.29%, Nasdaq slipped 0.40%, while the Dow Jones eked out a 0.08% gain, buoyed by a 12% surge in UnitedHealth shares after Berkshire Hathaway’s substantial investment.
• Consumer sentiment fell for the first time since April, with the University of Michigan’s August index dropping to 58.6 from July’s 61.7, on inflation worries linked to President Donald Trump’s tariffs.
• Geopolitical focus sharpened as President Trump left the Alaska summit with no Ukraine ceasefire, appearing open to some of President Putin’s demands and suggesting US willingness to support future Ukraine security guarantees.
• Investors’ eyes turn to the Federal Reserve’s Jackson Hole symposium for cues on potential rate cuts. Despite solid weekly gains (Dow +1.74%, S&P 500 +0.94%, Nasdaq +0.81%), uncertainty lingers as Fed members remain divided on further easing with unemployment at 4.2%.

Europe: Defensive Sectors Outperform as Markets Await Geopolitical Clarity

• The Stoxx Europe 600 closed flat after approaching five-month highs, extending its weekly advance.
• Mining and healthcare led gains, while personal care, real estate, and technology lagged — the latter pressured by weak results from Applied Materials Inc.

Asia: Japan’s Stock Market Hits Record Amid Growth, Hong Kong Lags on China Data

• The MSCI Asia Pacific Index climbed 0.7% for a weekly gain of 2.4%.
• Japan outperformed on robust economic growth and expectations for a Bank of Japan rate hike, with financials leading the rally.
• Hong Kong slipped on disappointing Chinese economic data for July, although it remains a regional outperformer year-to-date.

Singapore Market Snapshot: Key Indices and Sector Performance

• Market breadth: 239 gainers, 301 losers
• Volume: 1,370 million shares (-24.2% week-on-week)
• Turnover: SGD 1,574.1 million (-17.4% week-on-week)
• Straits Times Index 52-week range: 3,340.4 – 4,282.8

Major Global Indices: Weekly Performance Recap

FX and Commodity Markets: Key Movements

Featured Equity Research: Company Analysis and Investment Outlook

Golden Agri-Resources (GGR SP): Upstream Strength, Downstream Margin Pressures

• Rating: HOLD | Fair Value: SGD 0.27
• 1H25 revenue: USD 6.2b (+19.6% YoY), supported by stronger plantation output and higher CPO prices (FOB Belawan up 18.8% YoY to USD 1,090/tonne)
• EBITDA: USD 566.3m (+14.5% YoY); margin compressed to 9.2% from 9.6%
• PATMI: USD 160.3m (+56.5% YoY); Underlying PATMI: USD 232.5m (+23.2% YoY)
• Upstream segment: Revenue up 30.4% YoY to USD 1.2b, EBITDA up 50.7% YoY to USD 320m. Output growth driven by improved weather, higher mature-yielding plantations, and robust CPO prices. FFB production rose 10% YoY to 4.4m tonnes; palm product output up 9% YoY to 1.3m tonnes.
• Palm, Laurics & Others: Revenue up 19.7% YoY to USD 6.1b; EBITDA down 12.8% YoY to USD 245.7m, with margin narrowing to 4.0% from 5.5% amid stiff competition and weaker refining margins.
• Guidance: FY25 FFB production growth revised down to 1–2% YoY due to dry weather and aggressive replanting. 3Q25 production expected flat YoY; potential 4Q25 decline. Production cost guidance maintained at USD 310–315/tonne.
• Valuation: Trading at 0.5x forward P/B, near historical average (0.53x). Management sees fair value, maintaining HOLD recommendation.

ST Engineering Ltd (STE SP): Robust Order Book, Margin Expansion, Valuations Full

• Rating: HOLD | Fair Value: SGD 8.90 (raised from SGD 8.54)
• 1H25 revenue: SGD 5.9b (+7% YoY, +8% ex-forex), driven by growth across core businesses
• EBITDA: SGD 871m (+11% YoY); EBIT: SGD 602m (+15% YoY)
• PATMI: SGD 403m (+20% YoY), in line with expectations
• Dividend: 4.0 Singapore cents/share in 2Q25 (1H25 total: 8 cents/share, unchanged YoY)
• Segment highlights:
  • Commercial Aerospace: Revenue up 5% YoY to SGD 2.3b, led by Engine MRO and nacelle services. EBIT up 18% to SGD 223m.
  • Defence & Public Security: Revenue up 12% YoY to SGD 2.6b, EBIT up 13% to SGD 367m; growth supported by higher revenues and cost management.
  • Urban Solutions & Satcom: Revenue flat YoY at SGD 921m; EBIT up 32% YoY from SGD 9m to SGD 12m on margin improvement and cost discipline.
• Order Book: SGD 31.2b as of 30 June 2025 (+18% YoY); SGD 5.0b expected for delivery in 2H25. 1H25 new contracts: SGD 9.1b (SGD 4.4b in 1Q, SGD 4.7b in 2Q).
• Valuation: Trades at 28x forward P/E, ~3 standard deviations above historical average. Management confidence anchored by strong order book, but current valuation reflects much of the growth — HOLD recommendation maintained.

Singapore Blue-Chip Stocks: Market Capitalization, Multiples & Recommendations

Latest Research Ratings and Target Prices: Singapore and Hong Kong Top Picks

• ComfortDelGro Corporation (CD SP): BUY, SGD 1.75 – “A smooth ride”
• Nanofilm Technologies International Ltd (NANO SP): HOLD, SGD 0.72 – “Returning to profitability”
• UOL Group Ltd (UOL SP): BUY, SGD 8.65 – “Disciplined approach to growth”
• Wilmar International (WIL SP): BUY, SGD 3.54 – “Mixed 2H25 outlook, but China offers support”
• CapitaLand Investment Ltd (CLI SP): BUY, SGD 3.69 – “Still sowing the seeds”
• Stoneweg Europe Stapled Trust (SERT SP): BUY, EUR 1.82 – “Early rays of light shining through the dust”
• City Developments Ltd (CIT SP): HOLD, SGD 6.87 – “Anticipating higher dividends in FY25”
• Bumitama Agri Ltd (BAL SP): BUY, SGD 1.05 – “A bountiful harvest”
• Sembcorp Industries (SCI SP): BUY, SGD 8.02 – “GRS weakness offsets Renewables strength”
• Genting Singapore (GENS SP): BUY, SGD 0.96 – “Not there yet”
• Singapore Exchange Ltd (SGX SP): HOLD, SGD 16.15 – “Robust results with steady dividend growth guidance”
• United Overseas Bank Ltd (UOB SP): HOLD, SGD 38.20 – “Share buyback will provide price support”
• DBS Group Holdings Ltd (DBS SP): BUY, SGD 54.00 – “Better 2Q25; raising FV”
• Parkway Life REIT (PREIT SP): BUY, SGD 4.85 – “All the right moves”
• CapitaLand Ascendas REIT (CLAR SP): BUY, SGD 3.32 – “Awaiting acquisitions completion”
• CapitaLand Integrated Commercial Trust (CICT SP): BUY, SGD 2.52 – “In a sweet spot for growth”
• China Citic Bank (998 HK/601998 CH): HOLD, HKD 7.80 / BUY, CNY 9.55 – “Lacklustre core earnings outlook”

Conclusion: Navigating Opportunities Amid Uncertainty

The current market environment is characterized by a blend of optimism around structural growth sectors, robust order pipelines for selected companies, and caution in the face of geopolitical, inflationary, and sector-specific headwinds. Investors are encouraged to scrutinize both company fundamentals and broader macro signals, as reflected in the nuanced recommendations across sectors and names.

Stay tuned for further updates as global events and local developments continue to shape the investment landscape.