Broker: CGS International
Date of Report: June 11, 2025

Hong Fok Corp Leads Singapore Rebound: Technical Buy Signals, Sector Insights, and Key Market Trends for 2025

Market Overview: Trade Tensions, Inflation Data, and Market Movements

Global markets remain attuned to the ongoing trade negotiations between the US and China, with investors closely watching for any market-moving headlines. Wall Street saw stocks edge higher as talks continued in London, while US Treasuries wavered ahead of a significant \$58 billion auction. This comes as traders brace for the release of the US Consumer Price Index (CPI) for May, where consensus expects a mild uptick in inflation – particularly for merchandise. Core inflation, excluding food and energy, is anticipated to show a 0.3% increase, the highest in four months.

The S&P 500 is currently trading about 2% below its record high, reflecting the market’s cautious optimism. The dollar remains volatile, and bond yields held steady ahead of key auctions.

Singapore Banking Sector: Loan and Deposit Growth Trends

• Banking system loan growth eased to +3.4% year-on-year in April 2025.
• Loan demand across ASEAN is expected to support continued growth for the rest of FY25F.
• Deposit growth remains robust, with expectations that the CASA (Current Account Savings Account) ratio will improve as interest rates decline, leading to lower funding costs in 2Q25F.
• CGS International reiterates a Neutral outlook on Singapore banks, with DBS highlighted as the top sector pick.

Technical Spotlight: Hong Fok Corp Ltd – Bullish Reversal in Play

Company Overview

Hong Fok Corporation Limited operates as an investment holding company with core activities in property investment, property development, property management, and investment trading.

Technical Analysis: Strong Buy Signal

Hong Fok Corp (SGX: H30) has exhibited a compelling bullish rebound, supported by multiple technical indicators. The stock’s recent price action has confirmed a classic cup and handle formation, signaling a potential upside reversal.

Key Technical Highlights

• Bullish cup and handle formation confirmed with a breakout from the handle/flag.
• Strong bullish closure above S\$0.75, now acting as support, marks the initial sign of an upside reversal.
• Ichimoku indicator shows a powerful golden crossover, reinforcing bullish sentiment.
• Stochastic Oscillator signals rising momentum, confirming the bullish trend.
• 23-period Rate of Change (ROC) has rebounded and remains in positive territory.
• Directional Movement Index confirms robust bullish strength.
• Volume displays healthy expansion, supporting the price move.

Stock and Sector Ratings: Definitions and Distribution

Stock Ratings

• Add: Expected total return exceeds 10% over the next 12 months.
• Hold: Total return expected between 0% and +10% over 12 months.
• Reduce: Total return expected to fall below 0% over 12 months.
• Total return = (Target Price – Current Price) + Forward Net Dividend Yield.

Sector Ratings

• Overweight: Sector expected to outperform the market cap-weighted benchmark.
• Neutral: Sector expected to perform in line with the benchmark.
• Underweight: Sector expected to underperform the benchmark.

Recent Rating Distribution (As of March 31, 2025)

Important Disclaimers and Distribution Restrictions

This report is for informational purposes only and intended for clients of CGS International. It is not an offer or solicitation to buy or sell any securities. All recommendations, projections, and opinions reflect the analyst’s views at the time of publication and are subject to change without notice. Recipients should evaluate the information based on their own objectives and circumstances and consult with professional advisers before making any investment decisions.

Distribution is subject to local regulations and restrictions. The report is not intended for retail investors in certain jurisdictions, including but not limited to Australia, Canada, China, France, Germany, Hong Kong, Indonesia, Ireland, Malaysia, New Zealand, Singapore, South Korea, Spain, Sweden, Switzerland, the United Arab Emirates, the United Kingdom, and the United States, except as permitted by local law.

Conclusion: Key Takeaways for Investors

• Hong Fok Corp presents a rare technical buy opportunity, with strong bullish signals and well-defined support and resistance levels.
• The Singapore banking sector remains steady, with continued loan and deposit growth expected to underpin performance in 2025.
• Investors should remain vigilant for macroeconomic catalysts, especially US-China trade developments and US inflation data, which could impact market sentiment in the near term.

For further information or to discuss investment strategies, investors are advised to consult directly with CGS International or their professional advisors.