OCBC Investment Research
6 August 2025

Global Market Pulse: Key Earnings, Tariff Impacts, and Investment Insights Across Singapore, Asia, and Major Global Markets

Market Overview: Economic Headwinds and Opportunities

The global markets closed with a cautious tone as macroeconomic concerns, trade tensions, and monetary policy uncertainty weighed on investor sentiment. US equities ended lower amid worries about weakening services data and the impact of tariffs, while gold prices surged to US\$3,381.90 per ounce, signaling increased risk aversion. In Europe, select sectors like autos and food outperformed, whereas Asia saw tech-led gains and a rebound in risk appetite as traders bet on potential monetary easing.

Key Global Market Highlights

• US: Dow Jones fell by 0.14%, S&P 500 by 0.49%, and Nasdaq by 0.65%. Sectors like real estate and materials saw some gains, but overall breadth was poor. Tariff-related weakness hit consumer stocks, with Yum Brands down 5.1%. Caterpillar flagged US\$1.5 billion in tariff costs for 2025.
• Europe: Stoxx Europe 600 Index edged up 0.15%. Autos and food & beverage led, while consumer products and utilities lagged. Smith & Nephew soared 15% on earnings and a US\$500 million buyback. Infineon gained 4.6% as tariff impacts proved less severe than anticipated.
• Asia: MSCI Asia Pacific Index rose 0.7%, fueled by tech stocks. Indian markets dipped after news of higher US tariffs on Indian exports. Chinese brokerage shares climbed on tighter oversight of overseas trading gains.

Singapore Market Snapshot

Volume was up 4.7% to 1,613.1 million shares, but turnover slipped 6.3% to S\$1,394.0 million. Gainers outnumbered losers 301 to 214.

CapitaLand Ascendas REIT (CLAR SP): Awaiting Acquisitions for Next Growth Phase

• 1H25 DPU: Down 0.6% YoY to 7.477 Singapore cents, slightly missing expectations.
• Portfolio Dynamics: Rental reversions eased to 8.0% in 2Q25, still above management’s mid-single digit guidance. Strongest rental gains in the US (+10.9%), followed by Singapore (+7.8%), then Australia (+3.5%). Logistics in Australia saw a robust 18.6% rental reversion, but business space segment was softer at 2.4%.
• Occupancy: Portfolio occupancy rose to 91.8%, with Australia up 3.9% to 93.1%. Singapore and US saw minor declines, but UK/Europe was stable at 98.9%.
• Leverage: Aggregate leverage dipped 1.5ppt QoQ to 37.4%, expected to rise post-acquisitions of 9 Tai Seng Drive and 5 Science Park Drive.
• Strategy: SGD300-400 million of divestments targeted to fund redevelopment and acquisitions. Fair value estimate raised to SGD3.32 (from SGD3.21) on lower risk-free rate and updated assumptions.
• ESG: Upgraded ESG rating in Sep 2023, driven by superior corporate governance, executive pay disclosures, and robust ethics. Green financing comprises ~30% of borrowings, with a target for all properties to have green ratings by 2030.

Nanofilm Technologies International Ltd (NANO SP): Riding Equity Market Reforms

• Tariff Environment: Tariff rates in Vietnam (20%), India (25%), and the EU (15%) are lower than earlier announced, while China discussions are ongoing.
• Share Price Action: Stock surged 12.4% on 23 July 2025, likely on news of the SGD5b Equity Market Development Program (EQDP) and enhanced support for small/mid-cap stocks.
• Outlook: Global consumer confidence stayed firm in July, but end-demand impacts remain hard to quantify. Target FY26 P/E multiple raised from 17.9x to 20.6x, lifting fair value to SGD0.715 (from SGD0.61).
• ESG: Focuses on low carbon economy solutions, especially hydrogen. Aims to cut greenhouse gas intensity by 40% and wastewater discharge by 80% by 2030. Room for improvement in staff training (14 hours/employee in FY24, target 40) and board diversity (80% male in FY24).

CapitaLand Integrated Commercial Trust (CICT SP): Positioned for Growth

• 1H25 DPU: Rose 3.5% YoY to 5.62 Singapore cents, slightly ahead of forecasts.
• Financials: Gross revenue and net property income declined slightly due to asset sale, but would have been up 1.4% and 1.7% YoY, respectively, excluding the divested property.
• Rental Reversions: Retail at 7.7% (suburban: 8.8%, downtown: 6.9%, 1Q25: 10.4%). Office at 4.8% (vs. 5.4% in 1Q25). Portfolio occupancy slightly lower at 96.3%.
• Balance Sheet: Leverage fell 0.8ppt QoQ to 37.9%. Proposed acquisition of the remaining 55% of CapitaSpring for SGD2.9b (entry NPI yield ~4.2%). DPU accretion on pro forma basis expected to be 1.1%.
• Cost of Debt: Stable at 3.4%, expected to drop to low-3% by year-end. Assumed 2.7% for CapitaSpring acquisition. Fair value estimate raised to SGD2.52 (from SGD2.35).
• ESG: Upgraded in July 2022. Strong in green buildings, aligned with CapitaLand’s net zero by 2050 goals. Focused on building resilience, supporting communities, and innovation. Has board-level oversight for ethics and anti-corruption.

China Citic Bank (998 HK / 601998 CH): Marginal Growth Amid Macro Challenges

• Earnings Outlook: Marginal FY25 PATMI growth of 0.6% forecasted due to net interest margin and non-interest income pressures. 1Q25 PATMI grew 1.7% YoY to CNY19.5b; ROE declined 0.9ppt YoY to 11.40%.
• Asset Quality: Non-performing loan ratio was steady at 1.16% in 1Q25. Allowance coverage ratio dipped by 2.3ppt to 207.1% but remains high. CET1 ratio at 9.5%, down 27bps QoQ, still above regulatory minimum.
• Macro Trends: China’s loan growth moderated (7.1% YoY in June 2025). Mortgage rates rose slightly to 3.13%, but remain 101bps lower YoY, keeping NIM pressure high. Residential property values and transactions continue to decline.
• Valuation: Target price-to-book multiples adjusted to 0.52x (998 HK) and 0.69x (601998 CH), with fair value estimates at HKD7.80 and CNY9.55, respectively.
• ESG: Upgraded in July 2024. Majority independent board, strong retail banking financial safety, leading staff training partnerships, and robust data security protocols.

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Conclusion: Navigating the Late-Cycle, Tariff-Laden Landscape

The interplay of macroeconomic headwinds, tariff shocks, and selective sectoral resilience is shaping a late-cycle investment environment. Investors are advised to focus on diversification and quality, as highlighted by the detailed company analyses above. With active portfolio repositioning, robust ESG initiatives, and ongoing monetary policy shifts, certain names—especially in real estate, banking, and innovative tech—offer pockets of opportunity amid broader volatility.

OCBC Investment Research continues to monitor these dynamics closely, providing timely, actionable insights for market participants.