CGS International covering the report. May 8, 2025
Singapore Market Insight: Seatrium Rallies Amidst China’s Economic Stimulus and US Trade Talks
China’s Dual Tailwinds: Monetary Easing Meets Trade Diplomacy
China’s government recently delivered a significant economic boost ahead of crucial trade discussions with the United States. Officials unveiled a series of policies aimed at strengthening Beijing’s position in the upcoming negotiations.
Hours after confirming Vice Premier He Lifeng would travel to Switzerland for meetings this weekend with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, top economic officials in Beijing announced broad measures designed to stabilize markets, enhance tech innovation, and support small businesses. At a briefing on Wednesday, central bank Governor Pan Gongsheng revealed across-the-board rate cuts along with other steps expected to inject 2.1 trillion yuan ($291 billion) into the economy. This marks the most substantial easing by China since the trade conflict initiated by Donald Trump’s “reciprocal” tariffs disrupted the global economic landscape and markets.
Both sides approach the negotiations, set to begin Saturday, projecting confidence. Donald Trump recently stated in an interview with NBC that “China’s getting killed right now,” while Bessent has described the US’s 145% tariff as “unsustainable” for export-dependent China.
For the China market, these developments signal dual tailwinds: monetary easing providing domestic support and the prospect of easing trade tensions. While deal optimism appears largely priced in, analysts recommend maintaining a balanced strategy in the near term, cautioning against over-exposure to high-beta names. The potential for US dollar weakness is viewed as having a mixed impact on Hong Kong stocks over the medium to long term.
Seatrium Ltd: Technical Buy Signal Activated
SIN: Seatrium Ltd – The upside is back in action.
Last Price: 2.01
The previous sell call on Seatrium reached the second target price of S$1.62, based on a prior report dated April 2, 2025. A strong bullish rebound was observed at the S$1.62 level, prompting the initiation of a technical buy call on the stock.
Key technical observations supporting the buy recommendation include:
Seatrium has broken above a bullish flag formation.
This break occurred after successfully filling the bearish gap between S$1.84 and S$1.89.
A closure above the S$2.00 psychological level, supported by a strong candle and increased volume, indicates renewed buying interest in the stock.
Prices are currently trending above both the conversion and base lines of the Ichimoku cloud, following a bullish crossover.
The Stochastic oscillator has confirmed an oversold crossover, suggesting potential upward momentum.
The 23-period Rate of Change (ROC) has risen above the zero line, further indicating positive momentum.
Volume has increased above the 20-period average, signifying healthy expansion in trading activity.
Analyst: CHUA Wei Ren, CMT
Description of the company (from Bloomberg): Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding.
Technical Price Levels:
- Entry Price(s): 2.01, 1.92, 1.75
- Support 1: 1.97
- Support 2: 1.62
- Stop Loss: 1.56
- Resistance 1: 2.17
- Resistance 2: 2.58
- Target price 1: 2.22
- Target price 2: 2.50
- Target price 3: 2.68
- Target price 4: 3.00
Recommendation Framework
Stock Ratings Definition:
- Add: The stock’s total return is expected to exceed 10% over the next 12 months.
- Hold: The stock’s total return is expected to be between 0% and positive 10% over the next 12 months.
- Reduce: The stock’s total return is expected to fall below 0% or more over the next 12 months.
The total expected return combines the percentage difference between the target price and current price, plus the forward net dividend yields. Stock price targets have a 12-month investment horizon.
Sector Ratings Definition:
- Overweight: Stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.
- Neutral: Stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.
- Underweight: Stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.
Country Ratings Definition:
- Overweight: Investors should be positioned with an above-market weight in this country relative to benchmark.
- Neutral: Investors should be positioned with a neutral weight in this country relative to benchmark.
- Underweight: Investors should be positioned with a below-market weight in this country relative to benchmark.
Rating Distribution (%) for quarter ended on 31 March 2025 (551 companies under coverage):
- Add: 71.0% (1.3% Investment Banking clients)
- Hold: 20.9% (0.7% Investment Banking clients)
- Reduce: 8.2% (0.4% Investment Banking clients)
