Broker: Maybank Research Pte Ltd
Date of Report: 24 June 2025

Singapore Market Update: Inflation Trends, Key Corporate Moves, and Top Equity Picks for 2025

Macroeconomic Snapshot: Inflation Eases, Risks Remain

Singapore’s latest economic data reveals a continued decline in both core and headline inflation for May, settling at 0.6% and 0.8%, respectively. The research team maintains its forecast for 2025 at 0.5% for core CPI and 0.8% for headline CPI. While cautious consumption patterns and subsidies for essential services are expected to keep inflation in check, analysts flag the risk of upward pressure should geopolitical tensions in the Middle East escalate, particularly involving the Israel-Iran conflict. Notably, energy-related costs constitute 3.7% of the consumer price index (CPI) basket. A historical estimate suggests a 10% oil price hike would increase inflation by 0.2%, although today’s impact is likely less significant. The Monetary Authority of Singapore (MAS) is anticipated to maintain its policy stance in July.

Cosmosteel: Revised Takeover Offer Signals Shareholder Value Focus

Cosmosteel’s share takeover saga sees a positive turn as 3HA Capital raises its cash offer to 25 cents per share, up from the previously announced 20 cents. This adjustment comes after the independent financial advisor (IFA) deemed the initial offer “not fair.” The transaction is spearheaded by 3HA Capital, with key shareholders including Hanwa Singapore—a subsidiary of Tokyo-listed Hanwa Co, which now holds 31.61% of Cosmosteel—alongside HHH Group, Bursa-listed AYS Ventures Bhd, and Thor Capital. The revised offer aligns with the valuation range established by the IFA and reflects a thoughtful, analysis-driven approach. The final offer price positions itself at the mid-point of the IFA’s valuation and underscores a commitment to fair shareholder treatment.

Uni-Asia Group: Strategic Vessel Acquisition to Enhance Fleet Performance

Uni-Asia’s 70.2%-owned special purpose vehicle, Charm Bulkship, has entered a conditional agreement to acquire the vessel M/V Uni Horizon from Victoria Bulkship. The purchase consideration stands at USD20.33 million. The vessel’s performance underscores its appeal:

• FY22 Profits: USD0.07 million
• FY23 Profits: USD0.04 million
• FY24 Profits: USD0.75 million

The acquisition is seen as a strategic opportunity to bolster Uni-Asia’s ship portfolio and a regular part of its ongoing asset rebalancing efforts, targeting optimal shareholder returns. The move demonstrates Uni-Asia’s commitment to capitalizing on profit-generating opportunities in the shipping sector.

Singapore Depository Receipts: SGX Expands Global Access

The Singapore Exchange (SGX), in partnership with Phillip Securities, has launched six new Singapore Depository Receipts (SDRs) that mirror top Hong Kong and Thai blue-chips. This expansion brings the total SDR shelf to 21 securities, now covering about 50% of the SET50 and Hang Seng Index by constituent weight. The newly added SDRs feature:

• Hong Kong mega-caps: Semiconductor Manufacturing International Corp (SMIC), JD.com, and PetroChina
• Thai leaders: Bangkok Dusit Medical Services, CP Foods, and Gulf Development

The SDR market is demonstrating robust growth, with daily turnover surging elevenfold to reach a record SGD5.4 million in May, and assets under management (AUM) crossing SGD100 million in the same month. Over 60% of AUM is held by more than 7,000 retail investors. The most traded SDRs year-to-date are Hong Kong’s BYD and Alibaba, reflecting strong investor interest in Greater China equities.

Singapore Exchange Ltd (SGX): Riding Market Volatility to New Highs

SGX stands out as a “volatility champion” in 2025. The average daily cash equities trading value has seen a material increase, attributed to:

• Structural inflows as Singapore is perceived a safe haven
• Domestic fiscal stimulus (“pump priming”)
• Declining interest rates
• Accelerating corporate capital returns

Anticipated equity market reforms, expected to enter execution from 3Q, could further boost trading volumes. Additionally, rising trade and foreign exchange volatility is set to create further upside for SGX’s derivatives business. The target price for SGX is raised to SGD16.09, with a “BUY” recommendation maintained.

Singapore Telecommunications (Singtel): Navigating Optus Penalty with Resilience

Singtel’s Australian subsidiary, Optus, faces a AUD100 million fine for unconscionable conduct. However, provisions for this penalty have already been accounted for in Singtel’s FY25 financial statements, minimizing any negative impact on dividends, corporate strategy, or ongoing operations. Historical cases suggest limited commercial fallout. Singtel remains a “BUY,” supported by three principal catalysts:

• Narrowing of the holding company (HoldCo) discount
• Expansion of data center operations in Thailand and Singapore
• Continued operational improvements at Optus

Full Disclosure and Analyst Independence

The research team affirms that no part of the analysts’ compensation is related to the specific recommendations or opinions expressed in the report. Maybank Research Pte Ltd and its analysts report no shareholding or conflicts of interest in the companies discussed as of 24 June 2025.

Investment Rating Definition

Key Takeaways for Investors

• Inflation remains subdued, but global risks could drive volatility.
• Cosmosteel shareholders benefit from an improved, independently assessed offer.
• Uni-Asia’s vessel acquisition underscores a focus on profit resilience and fleet optimization.
• SGX and Singtel remain top picks, with strong catalysts for continued outperformance.
• SDR product growth reflects increasing demand for international exposure among Singapore investors.

Ongoing regulatory and market reforms, combined with robust corporate strategies, are positioning Singapore’s leading companies for further growth and resilience in 2025.