Lim & Tan Securities
Date of Report: 18 September 2025

Singapore Market Outlook: Fed Rate Cuts, Sector Highlights, and Top Stock Picks for 2025

As global markets react to fresh US Federal Reserve policy shifts and sectoral dynamics, Singapore’s financial landscape presents unique opportunities and insights for investors. This in-depth report by Lim & Tan Securities dissects the latest macro developments, sector performance, institutional and retail flows, and company-specific moves—delivering a comprehensive guide for financial professionals and market watchers.

Market Overview: Mixed Global Indices Amid Federal Reserve Policy Shift

On the heels of the Federal Reserve’s decision to trim interest rates by 25 basis points and signal further cuts, global equity markets reflected a nuanced response:

Singapore’s FSSTI index remains strong year-to-date, while Hong Kong’s Hang Seng Index leads with a remarkable 34.1% gain. Commodities such as gold (+39.6% YTD) and crude palm oil (+8.3% YTD) also stand out for investors seeking alternatives.

Federal Reserve Rate Cut: Implications for Markets and REITs

The Federal Reserve lowered its benchmark rate to a 4%-4.25% range after five consecutive meetings of no change. Policymakers now expect two more quarter-point reductions this year, with ongoing concerns over employment outweighing previous inflation fears. The US dollar strengthened as Powell described the move as a “risk-management cut.”

Key Takeaways:

• The US labor market is showing signs of weakness, prompting the Fed to shift priorities from inflation to employment support.
• Further rate cuts are expected, with projections for an additional 75 basis points of easing in 2025.
• Singapore’s 3-month SORA has already fallen 151bps YTD to 1.51%, and 10-year government bond yields compressed 111bps to 1.76%—directly benefiting REITs by lowering financing costs and increasing yield spreads.

Company Spotlight: Marco Polo Marine’s Strategic Growth in Offshore Logistics

Marco Polo Marine (SGX: 5LY) – A Resilient Play in Offshore Marine Logistics

Marco Polo Marine, trading at S\$0.075 (market cap: S\$281.5 million), demonstrates robust fundamentals and a promising outlook:

• Order book stands at approximately S\$100 million as of June 2025, secured for the next three years.
• Revenue visibility is high, with contracts spanning high-growth sectors such as offshore oil & gas and renewable wind energy.
• The company’s pioneering investment in Commissioning Service Operation Vessels (CSOV) and Crew Transfer Vessels (CTV) positions it to ride the global offshore wind boom—83 GW installed, 48 GW under construction, with 100 GW more projected in two years.
• Marco Polo’s CSOVs are increasingly being deployed to oil & gas operations, underscoring vessel versatility.
• Shipyard expansion is underway, with a fourth dry dock completed and expected to enhance performance from 4QFY2025 onwards.

The company’s strong order book and expansion into renewables reinforces a BUY recommendation for investors seeking growth and stability in the maritime sector.

Sector Analysis: Dividend, Valuation, and Forward Earnings Leaders

For investors seeking yield and value, these stocks stand out for their high dividends, low P/E, and attractive price-to-book ratios within the FSSTI universe:

Fund Flow Trends: Institutional vs Retail Investors (Week of 8 September 2025)

Recent fund flow data highlights a shift in market sentiment:

• Institutional investors registered a net sell of S\$9.1 million, down from a net buy of S\$49.1 million the previous week.
• Retail investors turned net buyers, with S\$0.5 million, reversing from net sales of S\$88.6 million the prior week.

For retail investors, UOB, SIA, and OCBC led the net buy list, while DBS, UOL, and Yangzijiang Financial saw the most net selling activity.

Sectoral Fund Flows: Institutional and Retail Movements by Industry

Institutional Investors (8 September 2025):

• Positive inflows into Consumer Cyclicals (+S\$14.8m), Real Estate excl. REITs (+S\$31.7m), and Technology (+S\$2m).
• Outflows from Consumer Non-Cyclicals (-S\$15.9m), Financial Services (-S\$21.8m), and Utilities (-S\$8.1m).

Retail Investors (8 September 2025):

• Strong net buys in Financial Services (+S\$31.6m), Industrials (+S\$22m), and Utilities (+S\$16.1m).
• Net selling in Real Estate excl. REITs (-S\$38.5m), Consumer Cyclicals (-S\$15.4m), and REITs (-S\$17.6m).

Macro Market News: US and China Market Themes

United States: Shifting Consumer and Labor Dynamics

• US consumer confidence remains low and spending is decelerating.
• Employment shows broad softening, limiting upside risks to consumption.
• Despite secular AI-driven themes supporting equities, caution is advised with tail-risk hedges recommended.

China/Hong Kong: E-Commerce Wars & Deflationary Pressures

• Alibaba, Meituan, and JD.com are locked in a fierce battle for instant retail market share, fueling a “game of chicken” with billions in discounts and coupons.
• This cash burn is depressing margins and drawing regulatory attention due to deflationary risks.
• Meituan is most exposed, with food delivery as its core revenue stream; JD.com and Alibaba face margin pressure, but Alibaba is less exposed due to smaller instant retail share.
• Key metrics to watch: migration of instant retail users to core platforms and active user growth (e.g., JD.com +40% YoY, Alibaba’s Taobao +25% in early August).

Key Share Transactions and Corporate Actions (1-17 September 2025)

Numerous companies also announced share buybacks, including HK Land, OCBC, UOB, ST Engineering, and others, signaling ongoing management confidence and shareholder support.

Dividends and Special Distributions Calendar

Several companies declared interim, special, and final dividends to reward shareholders. Key upcoming distributions include:

• Mapletree Logistics Trust: 10 Sept
• Mapletree Industrial Trust: 8 Sept
• Capitaland Ascott Trust: 29 Aug
• DBS: 25 Aug
• UOB: 28 Aug
• Comfort Delgro: 28 Aug
• Venture Corp: 12 Sept
• SGX: 27 Oct

SGX Watch-List: Latest Entrants and Compliance Monitoring

32 companies are currently under SGX’s watch-list for compliance and performance monitoring. Recent additions include Addvalue Technologies, Renaissance United, Telechoice, Tiong Seng Holdings, Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare.

Conclusion: Opportunities Amid Policy Shifts and Corporate Action

Singapore’s equity market, buoyed by resilient sectors and strong corporate activity, stands well-positioned as the Federal Reserve pivots to a more accommodative stance. Investors should monitor fund flows, sector rotations, and company-specific developments—especially in high-visibility names like Marco Polo Marine, DFI Retail Group, and the major banks. With the backdrop of global macro shifts, disciplined stock selection and yield-focused strategies remain crucial for outperformance in the months ahead.