OCBC Investment Research
Date of Report: 3 September 2025
Global Markets Stumble in September: Key Insights, Company Analysis, and Top Investment Ideas

Market Overview: September Begins with Volatility Across Major Indices

Global equity markets started September on a turbulent note, with renewed concerns about inflation and government debt causing a widespread bond selloff. Major US indices retreated, gold hit a record high, and the US dollar strengthened. The volatility index spiked, reflecting increased investor anxiety, while real estate stocks suffered steep declines.

• The Nasdaq Composite led losses, down 0.82%, followed by the S&P 500 (-0.69%) and Dow Jones (-0.55%).
• US 30-year Treasury yields neared 5%, pressuring tech stock valuations.
• Bond yields in Europe surged to decade highs, driven by concerns over rising government debt for defense and infrastructure spending amid sluggish growth.
• September is historically a weak month for US equities, with investors bracing for further volatility and closely watching the upcoming US payroll report.
• Futures markets expect a Federal Reserve rate cut, but a strong jobs report could change the outlook.

Asia Pacific Market Performance: Mixed Moves and Trade Tensions

Asian markets saw mixed performances, with the MSCI Asia Pacific Index down 0.3% amid profit-taking in Chinese tech stocks. Japan and South Korea posted gains, while India’s benchmark slipped, partly due to tensions over US tariffs on copper products. President Trump indicated no plans to lower tariffs on India.

Currency & Commodities Update

Research Spotlight: Agricultural Bank of China Delivers Resilient Earnings

Agricultural Bank of China (1288 HK / 601288 CH) posted first-half profit growth that outpaced its major peers, despite a challenging operating environment.

• 1H25 PATMI: Up 2.7% YoY to CNY139.5b
• Interim Dividend: CNY1.195 per 10 shares (~30% payout)
• Net Interest Income (NII): Fell 2.9% YoY to CNY282.5b due to net interest margin (NIM) compression (down 13bps YoY to 1.32%)
• Non-Interest Income: Surged 14.5% YoY to CNY87.3b, with net fee and commission income up 10.1% YoY to CNY51.4b
• Pre-Provision Operating Profit (PPoP): Slight decrease of 0.2% YoY to CNY258.1b
• Credit Impairment Losses: Down 3.0% YoY to CNY98.0b
• Operating Profit/PATMI: Up 1.7% and 2.7% YoY respectively
• CET1 Capital Adequacy Ratio (CAR): 11.1% (down 31bps HoH), Total CAR 17.5% (down 74bps HoH)
• NPL Ratio: Improved by 2bps to 1.28%, but allowance to NPL deteriorated by 4.6ppt HoH to 295.0%
• Profitability Ratios: Return on average total assets down 5bps YoY to 0.62%, return on weighted average net assets down 59bps YoY to 10.2%

ABC plans to continue funding rural development, expand county service coverage, and innovate across technology, green, inclusive, pension, and digital finance—aligned with central policy objectives. The fair value estimate is maintained at HKD5.85 / CNY6.35, but the rating is downgraded to SELL (601288 CH), with BUY maintained for the HK listing.

ESG Highlights

• ABC leads peers in staff management and talent pipeline development.
• Governance and business ethics are comparable to global peers, but whistleblower protection is lacking.
• Data protection and consumer measures are strong; climate-related risk analysis is embedded in lending.
• Sector-specific ESG credit policies remain absent.

Latest Investment Ideas: Top Companies and Sectors in Focus

Below is a summary of the latest research reports released by OCBC Investment Research, featuring ratings, fair values, and sector highlights.

Singapore Market Leaders: STI Stocks Sorted by Market Capitalisation

Here is a comprehensive breakdown of the largest stocks in the Straits Times Index, including their market cap, dividend yield, P/E ratios, and analyst recommendations:

Key Takeaways for Investors

• September’s volatility underscores the importance of close market monitoring and risk management.
• Banking and technology stocks remain under pressure from rising yields and policy uncertainty.
• ABC’s steady profit growth is noteworthy, but margin compression and declining capital ratios warrant caution.
• Diverse opportunities exist across sectors, from engineering and telecommunications to logistics and commodities, as highlighted by recent analyst recommendations.
• Dividend yields and P/E ratios across Singapore’s largest companies offer insights into market positioning and relative value.

Disclaimer & Ratings Guidance

This report is for informational purposes and does not constitute investment advice. Investors should seek professional guidance tailored to their specific financial objectives before making investment decisions. Ratings are based on medium-term outlooks, with BUY indicating expected returns above 10%, HOLD within +10% and -5%, and SELL below -5%. For smaller companies (market cap below S\$150m), higher thresholds apply.