OCBC Investment Research
Date of Report: 27 August 2025

Fed Drama, Earnings in Focus, and Asia Weakness: Global Market Pulse and Detailed Equity Insights

Global Market Overview: Fed Shake-Up, Tech Earnings, and Sector Highlights

The latest market pulse reflects a period of heightened volatility driven by political developments, crucial earnings releases, and sector-specific moves. US markets shrugged off concerns about the Federal Reserve’s independence after President Donald Trump dismissed Fed Governor Lisa Cook over allegations of mortgage document falsification. Despite the controversy, markets focused on short-term drivers like Nvidia’s upcoming earnings. The US dollar and long-dated Treasuries slipped after the Fed news, as legal uncertainty loomed over Cook’s removal, with a potential legal battle ahead.

The Federal Reserve Board, currently at six members with one vacancy after Adriana Kugler’s resignation, could see a significant shift in balance. If Stephen Miran, a Trump supporter, is confirmed and Cook is ousted, Trump would secure a 4–3 majority, with the possibility of further consolidating control if Jerome Powell steps down after his term ends in May 2026. However, this aggressive stance toward the Fed could backfire, potentially increasing long-term borrowing costs and impacting both financial markets and the broader economy.

US Market Snapshot

• The Nasdaq Composite rose 0.44%, buoyed by gains in Applovin and Nvidia (up 1.1% ahead of earnings).
• Defense stocks rallied as US Commerce Secretary Howard Lutnick hinted at possible government stakes in the sector. Lockheed Martin climbed 1.7%, with Northrop Grumman, RTX, and General Dynamics also advancing.
• AMD surged 2% after announcing a quantum computing partnership with IBM.
• US consumer confidence dipped slightly in August, but business equipment orders outperformed expectations in July, signaling renewed corporate investment.
• Markets are pricing in a 25-basis-point rate cut at the Fed’s September meeting, encouraged by signs of labor market weakness. However, upcoming inflation and jobs data could reshape these expectations.

Asia-Pacific Market Trends

• The MSCI Asia Pacific Index fell as much as 1.1% as the Chinese equity rally paused amid overheating fears and Japanese yen strength pressured exporters.
• Fresh tariff threats on advanced technology and semiconductors raised concerns about higher levies, particularly affecting regional sentiment.
• Japan and Hong Kong led the region’s declines.

Singapore Market Snapshot

Research Focus: China Tower Corporation (788 HK) – Enhancing Shareholder Returns

Positive Dividend Outlook and Cash Flow Recovery

• FY24 dividend per share (DPS) was CNY0.42, an 11.5% YoY increase, with a payout ratio of 76%.
• 1H25 interim DPS rose 21.6% YoY to CNY0.13. Guidance for full-year payout ratio is not less than FY24.
• FY25 DPS is expected to grow by 9% YoY to CNY0.46, translating to a payout ratio of 77%.

Revenue and Segment Performance

• Tower revenue remained stable in 1H25.
• The Distributed Antenna System (DAS) and Two Wings (Smart Tower and Energy) segments posted double-digit YoY growth.
• Full-year revenue growth is guided at low-single digits YoY; profit growth at high-single digits YoY – similar run rate expected in 2H25.

Depreciation Uncertainty

• No FY26 depreciation guidance yet, which could weigh on market sentiment as investors seek better earnings and dividend visibility.

Free Cash Flow (FCF) Dynamics

• 1H25 FCF fell 14.7% YoY to CNY16.3bn (from a high base), but improved sequentially versus 2H24 (-CNY1.6bn).
• Recovery driven by stronger operating cash flow as account receivables stabilized.
• Management expects better cash collection in 2H25, with CAPEX stable versus last year.
• Guidance points to stable or improved full-year FCF versus 2024, though account receivables remain a key watch point.

Research Team Recommendation: BUY

Latest Equity Research Coverage: Key Reports and Ratings

STI Stocks: Market Capitalisation, Valuation, and Research Recommendations

Below is a detailed breakdown of major STI stocks, including price, market cap, dividend yield, P/E ratio, and analyst recommendations across Buy, Hold, and Sell categories.

Key Takeaways for Investors

• The US market remains resilient in the face of political uncertainty, but the balance of power at the Federal Reserve is a key risk to monitor.
• Asia-Pacific markets are showing signs of fragility, with China’s equity rally pausing and Japanese exporters under pressure.
• The Singapore market saw mixed performance, with volume down but turnover higher, highlighting selective trading interest.
• China Tower Corporation stands out with a strong dividend outlook and improving cash flow, though depreciation guidance for 2026 remains a watch point.
• The latest research coverage offers a broad range of actionable ideas spanning large-cap blue chips, REITs, and growth sectors.
• STI stocks display a range of valuations and dividend yields, with analyst sentiment generally skewed toward Buy recommendations among the largest companies.

This comprehensive market pulse and equity research update provide investors, analysts, and market watchers with the data and insights needed to navigate current volatility and identify opportunities in global and Asian equities.