Broker: OCBC Investment Research
Date of Report: 1 September 2025
Global Markets Pulse: September 2025 – Key Trends, Equity Insights & Top Singapore Stock Picks

US Market Overview: September’s Historical Weakness Meets Tech Selloff

The US equity markets have entered September on a cautious note, historically the weakest month for stocks. Tech shares led a notable retreat, with the S&P 500 closing 0.64% lower, though still notching its fourth consecutive monthly gain. According to long-term data, the S&P 500 has posted negative returns 56% of the time in September, averaging a decline of 1.17%. The Nasdaq Composite fell 1.15% and the Dow Jones dropped 92 points (0.20%), with trading volume thinning ahead of the Labour Day break.
Key drivers included:
Persistent inflation reflected in the Fed’s preferred measures, denting prospects for imminent rate cuts.
Heavy profit-taking, especially in big tech, exacerbated by institutional rebalancing and a slowdown in retail investor activity.
Nvidia plunged 3.3%, extending its losing streak to three sessions, while a basket tracking the Magnificent Seven (Apple, Meta, and others) fell 1.4%.
Dell’s shares tumbled nearly 9% due to rising AI server manufacturing costs and fierce competition, offsetting its positive AI infrastructure outlook.
US consumer spending jumped at the fastest pace in four months, raising questions about the feasibility of a rate cut next month. Tariff-driven price pressures and the expiration of a US$800 import exemption may further impact costs for businesses and consumers. While an outsized 50 basis point rate cut isn’t the base case, it remains possible if August employment data disappoints. The Fed’s upcoming decisions hinge on the US CPI data due 11 September and policy meetings on 17 September.

Asia-Pacific Roundup: China Equities Rally, Japan Sees Profit-Taking

The MSCI Asia Pacific Index edged down 0.1%, with China’s CSI 300 rallying 0.74% to a new high since 2022 and Hang Seng China Enterprises advancing up to 1.3%. Japanese stocks saw profit-taking, tempering regional gains.

Singapore Market Snapshot & Major Global Indices

FX & Commodity Highlights

Singapore Market: Sectoral Performance & REITs

The Straits Times Index closed up 0.4% at 4,269.7, with Financials, REITs, and Real Estate sectors posting modest gains. Turnover climbed 16.2% despite a 5% drop in volume. The market saw 316 gainers against 200 losers.
Singapore REITs have rebounded alongside global equities but continue to underperform the broader market. Although 2Q25 results were soft, analysts expect an inflection point with average DPU (distribution per unit) forecasted to increase by 4.0% (median: 3.0%) in the next financial year. Sector valuations remain undemanding, suggesting upside potential.

Equity Research Highlights: Top Singapore Stock Picks

Info-Tech Systems Ltd (ITSL SP): Debit Cloud Revolution, Credit HR Meets Cutting-Edge Technology

Quality provider of cloud-based SaaS HR management software, strategically focused on SMEs.
Competitive pricing and customer-centric after-sales support differentiate ITSL from peers amid global SaaS adoption.
Initiated coverage with BUY rating and fair value (FV) of SGD1.00.
Secular growth trends support ITSL’s runway, with the SME market for cloud-based HRMS and Accounting Software across Singapore, Malaysia, Hong Kong, and India estimated at USD3.3 billion in 2024—100 times ITL’s FY24 revenue. These markets are forecasted to grow at CAGRs ranging from 7.2% to 11.9% between 2025-2029.
Key drivers:
Global SaaS adoption, digital transformation, and policy support.
Increasing strategic importance of HR and finance departments.
Growing necessity for regulatory compliance and operational efficiency.
1H25 Results:
Revenue grew 4.7% YoY to SGD22.4m, mainly from overseas markets.
HRMS users grew 15%, Accounting customers 28% since FY24 end.
Gross customer retention rate improved 3 ppt to 94%.
Adjusted net profit up 9% YoY to SGD7.2m.
Interim dividend of 1.55 Singapore cents per share declared, maintaining >50% payout ratio.
Stronger growth expected in 2H25, with marketing focused on high-ROI initiatives.
Valuation:
Target P/E multiple of 16x FY26 EPS (6.4 cents), reflecting a 20% discount to peer average due to smaller market cap and Asia focus.
Growth catalysts: deeper market penetration, new product launches.
Downside risks: intensified competition, SME vulnerability to macroeconomic shocks, increased credit risk.

ST Engineering Ltd (STE SP): A Differentiated Global Rearmament Play

Beneficiary of global rearmament boom and elevated defence spending.
Recent share price weakness attributed to profit-taking after strong YTD rally (+60%) and optimism around Russia-Ukraine ceasefire.
Fundamentals remain solid with 1H25 order book at SGD31.2b (+18% YoY), SGD5.0b to be delivered in H2 2025.
Strong revenue visibility and execution confidence for the remainder of the year.
Long-term growth remains intact, supported by:
Structural drivers of global defence spending.
Aging defence systems worldwide, sustaining demand even if Ukraine war ends.
FV estimate unchanged at SGD8.90. BUY recommended.

Singapore REITs: Approaching a Growth Inflection Point

S-REIT share prices rebounded but lag broader Singapore market.
2Q25 results underperformed, but FY26 DPU forecasted to rise 4.0% on average.
Valuations remain attractive, offering upside for yield-focused investors.

Latest Research Coverage: Report Summaries & Ratings

Straits Times Index (STI): Top Stocks by Market Capitalisation

Conclusion: Navigating September’s Volatility & Tapping The Growth Leaders

September’s historical volatility is playing out as expected, with tech-led corrections and macro headwinds driving cautious sentiment. Yet, select Singapore names such as Info-Tech Systems Ltd and ST Engineering Ltd present attractive growth opportunities, backed by resilient fundamentals, strong order books, and secular trends in SaaS and defence spending. Singapore REITs look poised for yield-driven recovery, offering value relative to global peers.
Investors should remain vigilant on macro signals and policy shifts, especially with critical US inflation and jobs data on the horizon. Accumulate quality Singapore stocks on corrections, with a keen eye on differentiated plays and those positioned for secular growth.