Broker: OCBC Investment Research
Date of Report: 18 September 2025

Global Markets React to Fed Rate Cut, Techtronic Industries and Golden Agri-Resources in Focus: Latest Equity Insights

Market Overview: Fed Rate Cut Dampens Risk Sentiment

Global financial markets experienced mild volatility following the latest U.S. Federal Reserve decision. Both equities and bonds edged lower as investors absorbed the widely expected interest rate cut. The S&P 500 slipped 0.1% with technology stocks underperforming, while U.S. bond prices also saw modest declines. The Federal Open Market Committee (FOMC) reduced the federal funds rate target range to 4%-4.25%, continuing its gradual easing cycle. Policymakers signaled two more quarter-point cuts this year, with a slightly upgraded growth forecast for 2026 and expectations of modestly higher inflation in 2026.

Fed Chair Jerome Powell reiterated a cautious “meeting-by-meeting” strategy amid a cooling labor market and lingering price risks. The U.S. dollar strengthened for a seventh consecutive Fed decision day, marking its longest rally since 2001. Investors remain focused on incoming inflation data and key corporate earnings for further direction.

Key Corporate Developments: China Tech and U.S. Chip Tensions

• China’s internet regulator has reportedly instructed major tech firms such as Alibaba and ByteDance to halt orders for Nvidia’s RTX Pro 6000D chips, drawing criticism from U.S. lawmakers.
• Apple reported a 6% year-on-year decline in China smartphone sales ahead of its iPhone 17 launch.
• Reddit entered early discussions with Google to renegotiate its content-sharing agreement, aiming to leverage its data’s growing value in AI and search applications.

Regional Market Recap

Europe

The Stoxx Europe 600 Index closed flat, as gains in technology and retail were balanced by declines in energy and mining. European chip equipment makers such as ASML attracted attention after reports that China’s Semiconductor Manufacturing International Corp. began trials of locally produced advanced chipmaking tools.

Asia

Asian equities traded in a narrow range, maintaining recent highs. Chinese and Hong Kong markets gained, offsetting losses in Korea and Taiwan. The MSCI Asia Pacific Index was steady following its record close. Chinese tech giants Alibaba, Tencent, and Baidu led the rally, fueled by optimism in AI development, monetization prospects, and supportive government policies. JD.com surged in Hong Kong after its chairman signaled a less aggressive pricing approach in the hotel sector. Financials, coal producers, travel firms, and humanoid robot stocks also saw gains on favorable policy developments.

Singapore Market Snapshot

Market breadth was evenly split with 288 gainers and 288 losers. Volumes and turnover were sharply lower, signaling a cautious trading environment.

World Indices and Commodities Performance

Research Spotlight: Techtronic Industries Co Ltd (669 HK)

Mid-Term Outlook Remains Resilient Despite Near-Term Headwinds

Techtronic Industries (TTI) has delivered a robust first half for 2025, with revenue and net profit rising 7.1% and 14.2% year-on-year to USD 7.8 billion and USD 628 million respectively. Yet, the company’s share price remains down approximately 2% year-to-date, trailing the Hang Seng Index’s 34% gain. The underperformance is attributed to ongoing macroeconomic uncertainty and tariff-related concerns.

TTI is reassessing the profitability of specific products shipped from China to the U.S. in response to tariff risks, with its Milwaukee brand suspending certain SKUs. Despite potential headwinds in 2H25, TTI’s growth outlook remains intact for FY26 and beyond, once supply chain relocation is completed and tariffs stabilize.

Key points for investors:

• Both Milwaukee and Ryobi brands are expected to maintain growth: Milwaukee targets double-digit YoY expansion, while Ryobi aims for mid-single-digit growth.
• Milwaukee will focus on high-growth segments such as mega projects, data centers, infrastructure, and renewable energy, with ongoing product innovation to boost productivity and safety.
• Management projects further EBIT margin improvement, targeting around 10% by FY27, driven by product upgrades and mix optimization.
• Federal Reserve rate cuts could further support demand by lowering borrowing costs and stimulating industrial/construction activity.
• Fair value estimate has been raised from HKD 136 to HKD 139.

ESG Update

TTI received an ESG rating upgrade in August 2025, reflecting enhanced corporate governance practices. No directors received more than 10% negative votes at the 2025 AGM, indicating improved investor sentiment. TTI ranks as average relative to global peers in governance and business ethics, leads in cleantech initiatives, but lags in staff management.

Golden Agri-Resources (GGR SP): Riding on CPO Price Momentum

Strong CPO Price, but Supply Headwinds Loom

Golden Agri-Resources (GAR) has benefited from higher crude palm oil (CPO) prices, which ended August 2025 at MYR 4,308/mt, up 3% month-on-month. Price strength was underpinned by tight supply from production challenges in major countries, resilient staple food demand, and Indonesia’s B40 biodiesel mandate. Indonesia’s CPO consumption grew 6.9% YoY in 1H25, boosted by a 14.3% surge in biodiesel demand to 6.2 million tonnes.

However, improved supply from Malaysia and Indonesia due to better weather could temper further CPO price gains. The Bloomberg consensus projects CPO prices to rise to MYR 4,453/mt in 4Q25 before easing to around MYR 4,294/mt in 2026.

GAR’s 1H25 results were bolstered by stronger plantation output and CPO prices. The upstream segment delivered solid growth, thanks to higher yields and price realization. That said, 2H25 could see softer Fresh Fruit Bunch (FFB) production due to aggressive replanting and recent dry weather, but earnings should remain supported by firmer CPO prices.

Key investment highlights:

• Fair value estimate lifted from SGD 0.27 to SGD 0.30 (based on 0.55x P/B, rolling over to FY26).
• ESG rating unchanged as of April 2025. GAR has improved palm oil supply chain oversight through satellite monitoring of deforestation but lags peers on environmental practices, carbon emissions management, and social/governance metrics.

Latest Research Ratings and Target Prices

Singapore STI Stocks: Market Capitalization and Valuations

A comprehensive look at Singapore’s top Straits Times Index (STI) stocks, sorted by market capitalization, reveals dividend yields, P/E ratios, and analyst recommendations for key blue chips and sector leaders.

Conclusion: Navigating Market Volatility with Informed Insights

The current market environment is shaped by macro policy shifts, sector-specific developments, and evolving ESG standards. Techtronic Industries is positioned for renewed growth beyond 2025 despite short-term uncertainties, while Golden Agri-Resources stands to benefit from resilient CPO prices, tempered by supply-side risks. Investors are advised to monitor ongoing central bank actions, sector trends, and company-specific catalysts for optimal portfolio positioning.