Lim & Tan Securities
Date of Report: 18 June 2025

Singapore Market Update: Key Stock Picks, Fund Flows, and Major IPOs – June 2025 Analysis

Market Overview: Mixed Global Performance Amid Geopolitical and Economic Uncertainty

The Singapore market, as tracked by the FSSTI Index, exhibited resilience with a close at 3,930.6, marking a daily gain of 0.6%, a 0.9% increase month-to-date, and a 3.8% rise year-to-date. In contrast, major global indices like the Dow Jones, S&P 500, and NASDAQ recorded slight declines, reflecting ongoing volatility due to heightened geopolitical tensions between Israel and Iran. The VIX Index spiked significantly, signaling increased risk aversion among investors.

Bond yields and key interest rates remained subdued, with the 3-month SGD SORA at 2.2% and the Singapore 10-year bond yield at 2.3%. Commodities showed strength, especially crude oil (+23.1% MTD) and gold (+29% YTD), while the Baltic Dry index nearly doubled year-to-date, reflecting robust shipping demand.

US Federal Reserve: Cautious Stance on Interest Rates

Anticipation surrounds the upcoming Federal Reserve meeting, where officials are expected to hold interest rates steady for a fourth consecutive session. The central bank’s “wait-and-see” approach is shaped by persistent uncertainty, particularly regarding the economic impact of government tariffs and trade policy decisions. While cooling inflation provides some relief, the Fed remains vigilant against potential price increases should higher tariffs activate later in the year.

The market expects the Fed’s rate cut cycle to begin no earlier than September, with a second cut possibly in December. Policymakers are likely to update their Summary of Economic Projections, with a close eye on growth, inflation, and unemployment forecasts. Notably, future rate cuts could be reduced from two to one, reflecting a more cautious outlook.

Key Singapore Market Highlights

Top Yield and Valuation Picks in the FSSTI Universe

• Highest Consensus Forward Dividend Yield:
  • Frasers Logistics Trust – 7.23%
  • DBS Bank – 6.86%
  • Mapletree Industrial Trust – 6.70%
  • Mapletree Logistics Trust – 6.58%
  • Mapletree Pan Asia Comm Trust – 6.56%
• Lowest Consensus Forward P/E:
  • Yangzijiang Shipbuilding – 6.93x
  • Jardine Cycle & Carriage – 7.07x
  • Jardine Matheson – 8.44x
  • UOB Bank – 9.82x
  • OCBC Bank – 9.97x
• Lowest Trailing P/B (Price/Book):
  • Hongkong Land – 0.42x
  • UOL Group – 0.44x
  • Jardine Matheson – 0.48x
  • City Developments – 0.52x
  • Mapletree Pan Asia Comm Trust – 0.69x
• Lowest Trailing EV/EBITDA:
  • Yangzijiang Shipbuilding – 3.58x
  • Genting Singapore – 5.21x
  • Jardine Cycle & Carriage – 5.85x
  • DFI Retail Group – 6.67x
  • SATS Ltd – 8.02x

Thakral Corporation: Major Value Unlock with GemLife IPO

Thakral Corporation (S\$1.44, down 3 cents) announced a transformative move as its Australian associate, GemLife Communities Group, launched an IPO on the Australian Securities Exchange to raise up to A\$750 million, implying a post-money valuation of A\$1.58 billion. This is set to be Australia’s largest IPO in 2025, with listing expected on 3 July 2025.

• Thakral, currently holding 31.7% of GemLife, will subscribe for additional shares, resulting in a reduced but still significant 16.8% post-IPO stake.
• The listing will shift GemLife from an associate to an investment measured at fair value through profit or loss, ceasing equity accounting and instead reflecting periodic fair value adjustments and dividend income.
• On a pro forma basis:
  • NAV per share increases 67% to S\$2.15 from S\$1.28.
  • EPS would have jumped 381% to S\$1.08 from S\$0.225 for FY2024.
  • Net borrowings decline 56% to S\$22.3 million; gearing ratio improves to 0.23 from 0.39.
  • Pro forma cash and bank balance rises to S\$38.4 million.
• Thakral trades at 6.0x forward P/E, 1.1x P/B, and 2.8% dividend yield. Pro forma P/B improves to 0.7x.
• Potential further upside from a 9.4% stake in The Beauty Tech Group Limited, which is evaluating strategic options, possibly including an IPO.
• Consensus target price is S\$2.04, implying a 41.7% potential upside.

Macro Market Insights: Global and Regional Trends

United States: S&P 500 Rally Raises Caution

• The S&P 500 has rebounded nearly 20% since Liberation Day, reaching new highs on optimism around trade de-escalation and limited policy fallout.
• However, fundamentals lag the rally, with technical indicators like VIX, SKEW, and VVIX at recent lows, signaling limited downside protection demand.
• With economic surprises fading, risk assets are vulnerable to reversal—defensive positioning is recommended.

China and Hong Kong: Falling Power Prices Ease Exporters’ Pain

• Chinese coal price crash (down 30% YoY) and increased renewable energy output have slashed power rates in export-heavy provinces Jiangsu and Guangdong.
• June contract prices plunged 24% in Jiangsu and 8.3% in Guangdong, hitting regulatory floors.
• Spot market reforms and renewable incentives are driving further declines, benefiting industrial customers.

Major Shareholder and Insider Transactions (1-17 June 2025)

Notably, Clearbridge Health saw both large insider buying and selling, highlighting active internal repositioning.

Share Buybacks

• Vigorous buyback activity from major firms including HK Land, APAC Realty, Olam, UOB, OCBC, DBS, and SGX.
• DBS repurchased 400,000 shares at S\$44.33, representing 7.3% of its buyback mandate.
• OCBC bought back 400,000 shares at S\$16.06, now 1.0% of its maximum mandate.

Institutional and Retail Fund Flows: Week of 9 June 2025

Top Institutional Net Buys and Sells

Top Retail Net Buys and Sells

Institutional investors were net sellers (–S\$130.5m) while retail investors stepped up as net buyers (+S\$132.5m) for the week, reversing the previous week’s pattern. Notably, financial services and REITs saw the largest institutional net outflows, while retail investors favored financial services and technology stocks.

Sectoral Fund Flow Breakdown

• Institutional:
  • Largest net outflow in Financial Services (–S\$217.7m).
  • Highest net inflow in Telcos (+S\$39.4m).
• Retail:
  • Strong net buying in Financial Services (+S\$183.1m).
  • Largest net selling in Technology (–S\$33.4m).

STI Constituents: Detailed Fund Flow Analysis (Week of 9 June)

Upcoming Dividends and Special Distributions

• Hotung Inv: 10.86 cts, Final, Ex: 27 May, Pay: 19 June
• Jardine Cycle and Carriage: US84 cts, Final, Ex: 28 May, Pay: 13 June
• Netlink Trust: 2.68 cts, Final, Ex: 28 May, Pay: 11 June
• SUTL: 5 ct, Final, Ex: 2 June, Pay: 19 June
• Econ Healthcare: 2.5ct, Special, Ex: 2 June, Pay: 16 July
• UMS: 1ct (1Q25), Ex: 9 July, Pay: 24 July
• SIA Engineering: 7 cts, Final, Ex: 28 July, Pay: 12 Aug
• SATS Ltd: 3.5 cts, Final, Ex: 30 July, Pay: 15 Aug
• Singtel: 10 cents, Final, Ex: 31 July, Pay: 19 Aug
• SIA: 30cts, Final, Ex: 8 Aug, Pay: 27 Aug
• UOB: 25 ct, Special, Ex: 15 Aug, Pay: 28 Aug

SGX Watch-List: Companies Under Regulatory Surveillance

A total of 32 companies are currently on the SGX watch-list, including recent additions such as Global Invacom Group, Green Build Technology, and Keong Hong. This list signals ongoing regulatory scrutiny and potential risk for investors in these counters.

Conclusion: Strategic Outlook for Singapore Investors

The Singapore market remains a compelling landscape for investors, with resilient performance amid global volatility, significant corporate actions (notably Thakral’s GemLife IPO), and robust fund flows. However, vigilance is warranted given ongoing macro uncertainty, evolving Fed policy, and sector-specific headwinds and opportunities. Monitoring insider activity, fund flow trends, and regulatory developments will be key to navigating the months ahead.