Broker: OCBC Investment Research
Date of Report: 4 August 2025

Singapore Market Pulse: Key Stock Insights, Earnings Highlights, and Strategic Moves Across Major Sectors

Market Overview: Global Volatility Returns Amid Trade Tensions and Weak Economic Data

The global markets ended the week on a volatile note as disappointing US jobs data, a fresh wave of tariffs from the US, and underwhelming quarterly results from Amazon weighed heavily on investor sentiment. All major US indices posted substantial declines — the Nasdaq Composite slid 2.2%, the S&P 500 fell 1.6%, and the Dow Jones Industrial Average lost 1.2%. Sectors most exposed to tariffs sold off, while defensive consumer staples managed modest gains. The Cboe VIX Index surged above 20, signaling heightened market anxiety.

The three-month moving average for US payroll gains dropped to just 35,000, marking the weakest pace since the pandemic. While AI and technology earnings could offer support, August and September have a history of market turbulence, and renewed trade tensions under the Trump administration are raising the average US tariff rate on imports.

In Europe, the Stoxx Europe 600 Index slipped 0.8% as auto and mining stocks were hit hard by new tariffs, but still logged a 0.9% gain for July. In Asia, the MSCI Asia Pacific Index lost up to 1% on Friday, led by declines in South Korea after authorities announced higher taxes on corporations and investors. Tech shares broadly weighed on the region, with Tokyo Electron tumbling after lowering earnings guidance.

CapitaLand Ascott Trust (CLAS SP): Strategic Portfolio Reconstitution for Uncertain Times

• Proposed Divestment: Selling Citadines Central Shinjuku Tokyo at a 100% premium over book value and 40.4% above independent valuations.
• Financial Impact: Divestment is accretive to FY24 distribution per stapled security by 1% on a pro forma basis if proceeds are used to lower debt.
• Rationale: The asset is mature, requiring heavy capex and possible closure for upgrades. Divestment unlocks flexibility and capital for higher-yielding opportunities, especially in Japan’s rental housing sector.
• Balance Sheet: Net proceeds of SGD187.4m could reduce aggregate leverage from 39.6% to 37.8%. Cost of debt expected to remain stable at 2.9% for 2025.
• Outlook & Valuation: 1H25 gross profit rose 6% YoY. Fair value estimate maintained at SGD1.02, pending unitholder approval for the transaction. BUY rating reiterated.
• ESG Leadership: Upgraded ESG rating in June 2025, with strong governance, business ethics, and green building credentials (43.4% of assets certified to green standards).

Singapore Post (SPOST SP): Unlocking Break-Up Value and Real Estate Monetisation

• Divestment Progress: Sold freight forwarding business for SGD177.9m, realizing a gain of SGD10.5m and freeing up SGD104m in cash.
• Next Steps: Plans for a SGD50m sale-and-leaseback of 10 post offices located at HDB shophouses.
• Valuation Update: Fair value revised to SGD0.590 (from SGD0.605) after factoring in recent divestments and refining assumptions, including a lower FY26 EV/EBITDA multiple (7.7x to 6.0x).
• Financial Snapshot: Pro forma FY25 EPS would have increased from 10.9 to 11.1 Singapore cents if the disposal had occurred earlier.
• Risks: Operations scaled down after Australian and freight forwarding divestments, leaving property and non-core assets as key value drivers. Domestic postal business is structurally declining, and international business faces a subdued environment. Ongoing board and management changes create strategic uncertainty.
• ESG Profile: Maintained high ESG rating, with strong governance, a majority-independent board, and robust audit/risk oversight. Environmental initiatives include an electrified delivery fleet.
• Rating: Upgraded to BUY on valuation grounds, but investors should exercise caution.

Sheng Siong Group (SSG SP): Accelerated Store Openings and Margin Expansion

• Business Growth: Added five new stores in 1H25 and two more in July 2025. New stores are driving revenue growth; comparable same-store sales were flat, but new store sales grew 6.4%.
• Financial Highlights: 2Q25 revenue up 7.0% YoY to SGD361.7m. Gross profit margin climbed to a record 31.4% (from 30.9% a year ago). PATMI up 0.5% YoY to SGD33.8m in 2Q25, bringing 1H25 PATMI to SGD72.3m. Interim dividend of 3.20 cents per share.
• Operational Outlook: Operating expenses rose due to staff costs for new stores but are expected to normalize as new stores ramp up. More store tenders are pending, with additional HDB sites expected to be released by June 2026.
• Strategic Tailwinds: Beneficiary of government cash handouts and CDC vouchers under the SG60 package. Store rationalization and competitor scale-down favor SSG’s market share expansion.
• Valuation: Fair value estimate raised from SGD1.99 to SGD2.37.
• ESG Note: ESG rating downgraded in December 2024 due to weaker non-pay benefits and lack of formal engagement surveys or training support. Strong in data security and governance, but lags on sustainable sourcing and environmental initiatives.

Frasers Logistics & Commercial Trust (FLT SP): Strong Rental Reversions, Higher Vacancies

• Performance Metrics: Solid 3QFY25 rental reversions of 43.3% (driven by 55.8% for logistics and industrial assets, including a major lease in Victoria at a 72.2% rental uplift). Cumulative 9MFY25 reversions at 30.7%.
• Occupancy and Leverage: Portfolio occupancy dipped 1.4 ppt QoQ to 92.5%. L&I occupancy fell 2.9 ppt (mainly in Australia and Singapore), while commercial occupancy rose 1 ppt in the UK. Aggregate leverage increased to 36.8% but will decrease to 35.4% after the planned divestment of 357 Collins Street, Melbourne.
• Financial Outlook: Divestment of 357 Collins Street (AUD192.1m) expected to complete by September 2025. Overall cost of debt rose to 3.2% (trailing 3 months) and could reach mid-3% by year-end. FY25 DPU forecast maintained; FY26 trimmed by 2.3% to reflect divestment and higher debt costs. Fair value estimate slightly reduced to SGD1.06.
• ESG Leadership: Upgraded ESG rating in June 2025. Top-tier anti-corruption framework and governance, with continued 5 Star GRESB rating for sustainability. Australia portfolio holds the highest Green Star industrial rating.
• Recommendation: BUY

Keppel Ltd (KEP SP): Asset Monetisation Accelerates, Share Buyback Announced

• 1H25 Results: New Keppel net profit jumped 25% YoY to SGD431m, with all-in net profit up 24% to SGD378m. Recurring income rose 7% to SGD444m. Return on equity improved to 15.4%.
• Segment Review:
  • Infrastructure: Largest contributor, net profit SGD346m (-5% YoY), impacted by narrower power spreads and lower asset management fees.
  • Real Estate: Returned to profitability (SGD98m profit vs. SGD20m loss in 1H24) on strong fee income and consolidation of new assets.
  • Connectivity: Net profit decreased 19% YoY to SGD57m due to lower mobile earnings and a forfeiture fee, partly offset by asset management gains.
  • Non-Core Portfolio for Divestment: Net loss of SGD53m, improved from a loss of SGD41m in 1H24.
• Strategic Progress: Asset monetisation has reached SGD7.8b since Oct 2020, with another SGD500m+ in deals under negotiation. Keppel targets SGD10-12b in asset sales by 2026 and aims to fully monetize its SGD14.4b non-core portfolio by 2030.
• Shareholder Returns: Interim dividend of 15.0 cents per share, plus a new SGD500m share buyback program.
• Valuation: Fair value estimate raised from SGD8.60 to SGD10.20. BUY rating maintained.
• ESG Excellence: Leading corporate governance and talent management. ESG premium factored into valuation.

Starhill Global REIT (SGREIT SP): Stable Performance and Outlook Amid Portfolio Changes

• FY25 Results: DPU increased 0.6% YoY to 3.65 Singapore cents, aligning with expectations. Gross revenue rose 1.2% to SGD192.1m; net property income advanced 0.8% to SGD150.2m.
• Portfolio Dynamics: Committed occupancy dropped 2.8 ppt QoQ to 94.6%, mainly due to a lease termination at Myer Centre Adelaide. Technicolor’s exit had a minor revenue/NPI impact. New tenant negotiations are underway for two-thirds of the vacated space.
• Other Developments: Arbitration initiated against Markor International Home Furnishings in China due to SGD1.5m in rental arrears (partially secured).
• Retail Trends: Shopper traffic and tenant sales at Wisma Atria (retail) declined by 0.2% and 4.1% YoY, respectively, in 2HFY25.
• Financial Health: Gearing improved by 0.6 ppt to 36.0%. Cost of debt stable at 3.67% with 76% fixed/hedged. Portfolio valuation dipped 0.2% due to asset sales and FX losses.
• Valuation & Outlook: FV estimate increased to SGD0.51 (from SGD0.46) as cost of equity assumptions were lowered. HOLD rating maintained. Expecting a stable outlook barring major economic or arbitration shocks. Trading at 0.7x P/B and 7.2% forward yield—above and below five-year averages, respectively.
• ESG Considerations: ESG rating maintained in Feb 2025. Governance lags global peers in board structure, but strong in green investment and sustainability practices (51.8% portfolio certified green).

Latest Analyst Ratings and Fair Value Estimates

Conclusion: Navigating Uncertainty with Strategic Repositioning

The current market environment is defined by heightened volatility and uncertainty, but leading Singapore-listed companies are proactively repositioning through strategic divestments, portfolio enhancements, and a focus on sustainability. Investors should remain vigilant, diversify across sectors, and pay close attention to company-specific catalysts and risk factors as outlined in each analysis above.