Lim & Tan Securities
Date of Report: 25 August 2025
Singapore Market Surges as Fed Rate Cut Looms: Sector Highlights, Stock Picks, and Institutional Flows

Market Overview: Singapore and Global Indices Rally on Fed Rate Cut Signals

Singapore’s financial markets experienced a robust rally, mirroring global optimism after the US Federal Reserve Chair Jerome Powell signaled the possibility of an imminent rate cut. The Straits Times Index (FSSTI) climbed to 4,253.0, posting a gain of 0.5% for the day, 1.1% for the month, and an impressive 11.4% year-to-date. Other global benchmarks, including the Dow Jones, S&P 500, and Nasdaq, also surged, with the Dow hitting a record high.

Fed Rate Cut Expectations Drive Sector Rotation: Neutral on Banks, Overweight on REITs

Powell’s dovish tone at Jackson Hole has sent rate cut expectations soaring to 90% for September 2025. This pivotal shift prompts a reassessment of sector strategies. Lim & Tan Securities now turns neutral on Singapore’s banking sector, anticipating headwinds as lower rates compress net interest margins. Conversely, the Singapore REIT sector is upgraded to overweight, poised to benefit from declining interest rates.

BRC Asia: Construction Sector Resilience and Strategic Projects

A standout in the report is BRC Asia, a key player in Singapore’s reinforcing steel sector. For the nine months ended 2025, BRC Asia delivered S\$1.12 billion in revenue and S\$63.9 million profit after tax, with a robust order book of S\$2.0 billion. The construction sector is highlighted as a stabilizing force for the economy, supported by a S\$19.6 billion infrastructure allocation in the 2025 Budget.

The construction sector’s resilience is reinforced by ongoing strategic projects:

• Changi Airport Terminal 5 (T5) and MRT expansions
• Tengah Hospital development
• Woodlands North Coast initiative
• 55,600 private residential units under construction as of Q2 2025
• Government Land Sales program to release land for 9,755 private units in 2025
• HDB’s ambitious launch of 19,600 BTO flats and 10,200 Sale of Balance Flats

BRC Asia trades at a market cap of S\$1.08 billion, with 12x forward PE, 2.3x PB, and a 4% dividend yield. Consensus target price remains at S\$3.92, suggesting limited upside. Lim & Tan Securities maintains a HOLD rating due to high relative valuations.

Singapore Market Sector & Stock Screen: Yields, Valuations, and Picks

Key highlights from the FSSTI screening show top consensus dividend yields and attractive valuation metrics among leading stocks.

Global Macro: US Dollar, Fed Policy, and China’s Decoupling Efforts

The US dollar’s waning safe-haven status during market volatility points to a long-term diversification away from US assets, supporting non-US currencies and government bonds. However, recession risks could reignite demand for the dollar. The Fed’s path ahead remains clouded by stubborn inflation and a weakening labor market, with policy disagreements among officials and White House scrutiny adding to uncertainty.

China is actively seeking to reduce reliance on US pharmaceutical products and medical supplies, instructing state-owned drugmakers to explore alternatives from domestic or Japanese sources. This move, triggered by escalating trade tensions and tariffs, aims to mitigate supply chain vulnerabilities. While immediate substitution is unlikely due to regulatory reviews, the effort marks a strategic shift in China’s healthcare procurement.

Share Transactions and Institutional Flows: Acquisition, Disposal, and Buybacks

Recent market activity showcases significant acquisitions, disposals, and share buyback programs among SGX-listed companies.

Major share buybacks were executed by HK Land, Keppel Ltd, Global Investment Limited, Thakral, OCBC, UOB, Raffles Medical, SIA Engineering, OUE Ltd, Q&M Dental Group, ST Engineering, The Hour Glass Ltd, and others.

Institutional and Retail Fund Flows: Weekly Sector Rotation

For the week of 11 August 2025, institutional investors were net sellers at -S\$385.5 million, while retail investors were net buyers at +S\$329.4 million. Top institutional buys included City Developments, iFast Corporation, Genting Singapore, and Jardine Matheson. Major institutional sells focused on Sembcorp Industries, DBS, and UOB. Retail investors favored Sembcorp Industries, UOB, DBS, SIA, and ST Engineering.

Dividend and Special Distribution Calendar

Key upcoming ex-dividend and payment dates for leading SGX stocks are listed below:

SGX Watch-List: Companies Under Review

A total of 32 companies are currently under the SGX Watch-List, including recent additions such as Addvalue Technologies, Renaissance United, Telechoice, Tiong Seng Holdings, Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare. The list serves as an important reference for investors tracking regulatory and performance developments.

Conclusion: Market Outlook and Investment Strategy

• The Singapore market is buoyed by optimism over Fed rate cuts, but sector rotation is underway with REITs favored over banks.
• BRC Asia stands out for its robust construction-driven order book but faces valuation concerns.
• Macro risks persist from US-China trade tensions and policy discord at the Fed.
• Institutional and retail flows highlight active sector rotation and stock selection.
• Multiple companies offer attractive dividend payouts, with ex-dividend and payment dates approaching.
• Investors should monitor SGX Watch-List companies for regulatory updates.

Lim & Tan Securities continues to provide timely insights for investors navigating Singapore’s dynamic equity landscape.