Broker: OCBC Investment Research
Date of Report: 25 August 2025

Global Markets Rebound on Fed Optimism: Key Investment Insights and Singapore Stock Analysis

Market Pulse: US, Europe, Asia Rally on Hopes of Rate Cuts

US Market Overview:
US equities staged a significant rebound as Federal Reserve Chair Jerome Powell hinted at imminent rate cuts during his Jackson Hole speech. Powell shifted focus to the risks facing the jobs market, implying that the Fed may act before inflation is fully tamed. This move ignited optimism across markets:

• Dow Jones surged by 846.24 points (1.89%), hitting a record high.
• S&P 500 rose 1.52%.
• Nasdaq Composite gained 1.88%.

Investors are now closely watching the speed and size of potential rate cuts, with upcoming data likely to influence market sentiment. Nvidia Corp’s upcoming earnings are also under the spotlight, given its outsized influence (almost 8% weight in the S&P 500) and central role in AI development.

Europe:
The Stoxx Europe 600 Index gained as much as 0.8%, while the UK’s FTSE 100 reached a record and Germany’s DAX approached a July peak. The Stoxx 600 is up 11% year-to-date, slightly ahead of the S&P 500, buoyed by low interest rates and robust government spending in Germany.

Asia-Pacific:
Asian stocks edged higher, with the MSCI Asia Pacific Index rising 0.1%. Chinese and South Korean equities offset declines in Taiwan and India. Chinese shares posted their strongest weekly gain since November, driven by chip sector momentum and supportive policy, though trade tariff concerns and property sector woes remain.

Singapore Market Snapshot

Market activity saw a decline with total volume at 1,371.7 million (-18.1%) and turnover at 1,268.7 million (-14.1%). The 52-week STI range is 3,372.4 to 4,282.8, with 332 gainers and 175 losers.

Global Indices & Commodities Overview

FX & Commodities:

• USDSGD: 1.2814 (+0.6%)
• USDJPY: 146.94 (+1.0%)
• USDCNY: 7.168 (+0.2%)
• WTI Crude: USD 63.66/bbl (+0.2%)
• Brent Crude: USD 67.73/bbl (+0.1%)
• Gold: USD 3,371.9/oz (+1.0%)
• Silver: USD 38.89/oz (+1.9%)

Featured Company Analysis: Singapore Post (SPOST SP) – Transition Period

Key Highlights:

• 1QFY26 group revenue fell by 23.8% year-on-year to SGD162.3m, primarily due to declines in letter mail, domestic, and international e-commerce volumes.
• Operating profit dropped 60% YoY to SGD3.4m, with an operating margin of 2.1% (down from 3.9% a year earlier).
• Occupancy rate in the property segment slipped slightly from 98.2% (31 Mar 2025) to 97.8% (30 Jun 2025), with retail at 100% and office at 97%.
• Group operating expenses declined by 22.7% YoY to SGD158.2m as cost base was right-sized.
• Fair value estimate reduced to SGD0.495 (from SGD0.59); rating downgraded to HOLD.

Strategic Update: Management is focusing on maximizing asset utilization and driving operational efficiency. A board renewal has been completed, and the search for a new CEO is underway. The company clarified that the sale-and-leaseback of HDB shophouses was a one-off, and no further major divestments are expected until the strategy reset.

Valuation: The removal of the post office network’s estimated value from the sum-of-the-parts valuation method, combined with the lack of clarity on future divestments, led to a cut in fair value to SGD0.495 and a HOLD recommendation.

ESG Update: Singapore Post maintains a leading position in corporate governance, with a majority-independent board and fully independent audit and risk committees. The company’s labor management is on par with industry peers, while carbon mitigation initiatives (like fleet electrification) underscore its environmental credentials.

Latest Company Reports: Ratings and Fair Values

STI Stocks by Market Capitalisation: Key Valuations and Recommendations

Conclusion: Navigating Market Uncertainty with Cautious Optimism

With central banks signaling possible rate cuts and abundant liquidity on the sidelines, global markets may find support in the medium term. However, the speed and magnitude of policy shifts, along with key earnings (notably from Nvidia), will shape sentiment. Investors should monitor data releases and company updates closely, especially in sectors exposed to technological and policy shifts.

For Singapore, the focus remains on operational efficiency and asset maximization, as seen with Singapore Post and other major corporates. ESG credentials continue to differentiate leaders in the market. As always, prudent stock selection and a clear understanding of company strategies are essential for navigating the evolving investment landscape.