OCBC Investment Research
2 September 2025
Global Markets: September Outlook, Bullish Strategies, and Key Stock Picks for Investors

Market Overview: Equities Rebound as Volatility Looms Ahead

Stock futures in the United States showed a modest rebound following a technology-led selloff, setting a steadier tone for a typically volatile month. Gold prices approached record highs, and silver surged beyond US$40 an ounce for the first time since 2011. Investor optimism is rising on the prospects of a Federal Reserve rate cut this month, even as concerns mount about the central bank’s independence amidst political maneuvering to replace key Fed officials.
A federal appeals court’s ruling that most of President Trump’s global tariffs are illegal is likely to reignite trade tensions, despite Trump’s claims that India offered to eliminate tariffs on US goods. However, the timing and intent of this offer remain unclear.
Strategists remain positive, viewing recent pullbacks as healthy for the ongoing bull market. The S&P 500 is projected to rise 20% by the end of 2026, although tariff uncertainties and economic data—particularly the upcoming nonfarm payrolls report—are expected to influence the Fed’s next move on rates.

Regional Markets: Europe and Asia Show Mixed Performance

• Europe: European stocks edged higher, with the Stoxx 600 Index up by 0.23%. Automakers, banks, and industrials led the advance, while insurers lagged. Defence stocks benefited from reports of possible military deployments to Ukraine. The French CAC 40 was flat amid political and fiscal uncertainty after last week’s 3.3% drop.
• Asia: Asian equities were mixed. Gains in Hong Kong, driven by Alibaba’s strong AI-fueled revenue, offset losses in Japan and South Korea. The MSCI Asia Pacific Index rose 0.1%. However, chipmaker weakness weighed on broader sentiment.

Singapore Market Snapshot

Market Breadth and Volumes

• Volume: 1,444.9 million (+25.4%)
• Turnover: 1,319.8 million
• Gainers/Losers: 316/225
• 52-week Range: 3,372.4 – 4,282.8

Global Market Indices

FX & Commodities Snapshot

Featured Company Analysis: Bank of China Delivers Stable Results

Bank of China (3988 HK / 601988 CH): Steady in Uncertain Times

• 1H25 PATMI (Profit After Tax and Minority Interests) declined slightly by 0.9% YoY to CNY117.6 billion.
• Interim dividend of CNY1.094 per 10 shares declared, maintaining a 30% payout ratio.
• Net interest income (NII) fell by 5.3% YoY to CNY214.8 billion, with net interest margin (NIM) compressed by 18bps to 1.26% due to lower loan yields and foreign currency interest rate cuts.
• Non-interest income surged 25.7% YoY to CNY114.6 billion, supporting a 3.6% rise in operating income to CNY329.4 billion.
• Pre-provision operating profit (PPoP) was nearly flat at CNY209.9 billion (+0.1%).
• Impairment losses on assets narrowed from CNY60.6 billion to CNY57.5 billion.
• Higher operating expenses and taxes led to the slight PATMI decline.
• Strong capital position: CET1 ratio at 12.6% (up 37bps HoH); total CAR at 18.7% (down 9bps).
• Credit cost dropped from 0.71% to 0.58%.
• NPL ratio improved to 1.24% (from 1.25%), provision coverage fell to 197.4% (down 3.2ppt HoH).
• Continued focus on “Five Major Tasks”: technology finance, green finance, inclusive finance, pension finance, digital finance.
• Green loans up 17.0% to CNY4.54 trillion; inclusive finance loans exceeded CNY2.65 trillion.
• Credit support to 161,100 technological enterprises with CNY4.59 trillion in loans.

Valuation and ESG Insights

• Target P/B multiple: 0.61x for HK shares (fair value HKD 5.60); 0.74x for A-shares (fair value CNY 6.30).
• ESG rating upgraded in Dec 2024; leading in corporate governance, with executive oversight of business ethics. Some historical controversies noted.
• Internal product reviews and board-level oversight for sales/lending practices, sector-specific credit policies for environmental risk, and robust data security measures.
• Recommendation: BUY

Latest Stock Picks and Strategic Calls

Below is a summary of current ratings and fair value estimates for key stocks and sectors:

STI Stocks by Market Capitalization: Key Metrics and Calls

Conclusion: Navigating Opportunities and Risks in a Volatile Market

As September unfolds, investors should remain vigilant amid heightened volatility, trade policy uncertainties, and pivotal economic data releases. The latest results and recommendations across sectors—from banking and technology to real estate and green finance—offer both defensive and high-growth opportunities. With comprehensive coverage on leading stocks and market indices, investors are well-positioned to leverage market movements and sector trends for strategic portfolio gains.
Disclaimer: This article is for informational purposes and does not constitute investment advice. Readers are encouraged to seek professional financial guidance based on their individual circumstances and risk profile.