Broker: CGS International
Date of Report: September 5, 2025
OCBC Poised for Bullish Breakout as Asian Bond Markets Roil and China Tech Faces Involution Challenges
Market Recap: Asian Bonds Under Pressure, Political Shifts in Japan, and China’s Earnings Dilemma
The latest market session saw dramatic shifts across Asian bond markets, with Japanese super-long government bonds hit hard by a global selloff and rising concerns over government spending and inflation. Investors reacted to both global fiscal anxiety and domestic political uncertainty, as key figures in Japan’s Liberal Democratic Party considered stepping down, further fueling selling pressure in the country’s debt markets.
Key overnight highlights include:
- Japan’s 30-year government bond yield surged 8.5 basis points to 3.285%, a historic high since its debut.
- The 40-year yield soared 9 basis points to 3.535%.
- 20-year yields hit levels unseen since 1999, tracking broader losses in US and European bonds.
- Market commentary attributed this pressure to global fiscal concerns, steepening yield curves, and political uncertainty within Japan’s ruling party.
China Strategy: Involution and the Tech Opportunity
China’s equity landscape continues to be shaped by fierce competition and technological innovation. The food delivery sector’s subsidy wars have weighed heavily on Hang Seng’s first-half 2025 earnings, forcing negative earnings revisions for the full year.
Noteworthy observations:
- Hang Seng’s 1H25 earnings suffered due to aggressive subsidy competition in food delivery.
- Consensus now expects negative earnings growth for Hang Seng in 2025.
- Despite this, advances in AI and technology remain compelling growth drivers for Chinese Tech.
- Analysts stress that addressing involution-style competition is critical for sustainable, compounded earnings growth across Chinese equities.
Technical Spotlight: Oversea-Chinese Banking Corp Ltd (OCBC) – Bullish Momentum Builds
Oversea-Chinese Banking Corporation Limited (OCBC) is firmly in the spotlight with a strong technical buy signal. The company, a leading provider of comprehensive banking and financial services across Asia, is positioned for a bullish breakout, with robust price action and positive technical indicators.
| Entry Price(s) |
Support 1 |
Support 2 |
Stop Loss |
Resistance 1 |
Resistance 2 |
Target Price 1 |
Target Price 2 |
Target Price 3 |
Target Price 4 |
| 16.98, 16.50, 15.97 |
16.50 |
15.80 |
15.23 |
17.06 |
19.60 |
18.47 |
19.30 |
20.15 |
22.16 |
Company Snapshot: OCBC
OCBC delivers a broad suite of financial services, including deposit-taking, lending, international trade financing, investment and private banking, treasury, stockbroking, insurance, credit cards, cash management, and asset management.
Technical Analysis: Why OCBC Looks Bullish
- Major Uptrend Intact: The stock’s price action remains strongly within its long-term uptrend.
- Pennant Breakout: A bullish continuation is anticipated following a clear breakout from a pennant formation; the S\$17.06 resistance has weakened after multiple tests.
- Ichimoku Indicator: All components signal a robust bullish trend, with rising momentum.
- MACD: Both the signal and MACD line are trending above zero, with a positive histogram.
- Stochastic Oscillator: Shows a steady upward trajectory.
- Rate of Change (ROC): The 23-period ROC is positive.
- Directional Movement Index: Indicates steady bullish strength.
- Volume: Trading volume is expanding healthily, supporting the bullish narrative.
Rating Framework and Analyst Coverage
The rating system for stocks, sectors, and countries is defined by total return expectations and market cap-weighted recommendations. For the quarter ending June 30, 2025, the rating distribution is as follows:
| Rating |
% of Coverage |
% Investment Banking Clients |
| Add |
70.6% |
1.1% |
| Hold |
20.5% |
0.5% |
| Reduce |
8.9% |
0.5% |
As of June 30, 2025, there were 561 companies under coverage.
Global Distribution and Regulatory Notes
The research is distributed globally under strict regulatory frameworks, with specific restrictions and disclosures for each jurisdiction. Key highlights:
- Distribution is subject to local regulations and is generally directed at professional, institutional, or sophisticated investors.
- CGS International and its affiliates may own or have interests in the securities covered and may conduct related business or investment banking activities.
- The analyst(s) responsible for this report certify their views are independent and not influenced by any compensation related to investment banking transactions.
Conclusion
OCBC is positioned for a significant bullish move, supported by strong technical signals and healthy trading volume, making it a stock to watch for investors seeking exposure in Singapore’s financial sector. Meanwhile, Asian bond markets are experiencing historic volatility, and China’s equity landscape continues to wrestle with the challenges and opportunities of technological innovation and intense competition. Investors are encouraged to assess their own objectives and risk tolerance before making any investment decisions, while keeping a close watch on developments highlighted in this comprehensive market analysis.
