Lim & Tan Securities
12 August 2025

Singapore Market Update: Keppel’s S\$1.43bn M1 Divestment, APAC Realty’s Stellar Growth, and Sector Flows – Full Breakdown

Market Overview: STI Outperforms Region with Robust YTD Gains

Singapore’s FSSTI Index closed at 4,232.8, posting an 11.8% year-to-date (YTD) gain, outperforming several regional peers. Key indices highlights include:

• FSSTI: +1.4% month-to-date (MTD), +11.8% YTD
• UKX (FTSE 100): +0.0% MTD, +11.7% YTD
• HSI (Hang Seng): +0.5% MTD, +24.2% YTD
• SPX (S&P 500): +0.5% MTD, +8.4% YTD
• NKY (Nikkei 225): +1.8% MTD, +4.8% YTD

Daily market value traded reached S\$1,361.8 million, with volume at 1,245.7 million shares. The STI’s 52-week high stands at 4,274.3 while the low is 3,229.2. In the US, the S&P 500, Nasdaq, and Dow Jones all ended lower on Monday.

Commodities and Interest Rates Snapshot

Interest rates remain subdued:

• 3 Mth SGD SORA: 1.8 (-1.2% 1D, -3.9% MTD, -42.2% YTD)
• SG 10 YR Bond Yield: 2.0 (+0.4% 1D, -6.0% MTD, -31.2% YTD)
• US 10 YR Bond Yield: 4.3 (flat 1D, -2.0% MTD, -6.2% YTD)

Keppel’s Strategic S\$1.43bn M1 Telco Divestment: A Transformational Move

Keppel, trading at S\$8.58 and under a trading halt, announced a landmark agreement to divest its M1 telco business to Simba Telecom for an enterprise value of S\$1.43 billion. The S\$1.0 billion in cash proceeds for Keppel’s 83.9% stake will be fully paid in cash, while Keppel retains M1’s fast-growing ICT business.

• Implied Valuation: 7.3x EV/EBITDA
• Keppel will recognize an estimated S\$222 million accounting loss, but cumulative cash returns since 1994 (initial investment, dividends, and divestment proceeds) will exceed S\$700 million.
• Transaction aligns with Keppel’s asset-light, global asset manager strategy, sharpening focus on digital infrastructure.
• Regulatory approval required from Singapore’s Infocomm Media Development Authority; no shareholder approval needed for Keppel or Simba.
• Keppel’s market cap: S\$15.6 billion; trades at 18x forward PE, 1.5x PB, 4% yield. Consensus target price: S\$9.70 (13% upside).
• Potential for special dividend as part of proceeds may be used to reward shareholders.

CEO Loh Chin Hua highlighted the strategic benefits: “This divestment simplifies our business, advances our asset manager strategy, and unlocks nearly S\$1 billion in cash for debt reduction, new growth, or shareholder reward. It supports the market’s re-rating of Keppel.”

APAC Realty Delivers Strong H1 2025 Results, Boosted by Residential Market Rebound

APAC Realty Limited (S\$0.705, +0.07), the leading ERA real estate group, posted robust financials for the half-year ended 30 June 2025:

• Revenue: S\$341.5 million
• Profit After Tax: S\$11.1 million (3x year-on-year growth)
• New home sales revenue: S\$131.2 million (vs. S\$57.9 million in 1H2024)
• Developers sold 5,566 private residential units (including ECs) vs. 2,484 last year
• Gross profit: S\$35.8 million (+46.2% y-o-y)
• Cash balance: S\$47.6 million (30 June 2025)
• Operating cash flow: S\$15.6 million (vs. outflow S\$0.3 million in 1H2024)
• Interim dividend: 2.70 cents/share (78.1% payout, 3x last year’s interim)

CEO Marcus Chu noted a strong rebound in new home sales since 4Q2024, with 4,587 private homes sold in the first half, up 143% from the previous year. Recent launches like LyndenWoods saw a 94.5% take-up rate, reflecting robust demand from genuine buyers despite new Seller’s Stamp Duty (SSD) measures.

Outlook and Regional Expansion

Singapore’s private residential market continues to gain momentum:

• Private residential resale up 7.5% (7,802 units sold); HDB resale down 5.0% (13,692 units)
• GLS programme to add nearly 10,000 units in 2025 (+50% vs. 2021–2023 average)
• 57,000 new private residential units (including ECs) expected over next few years
• SSD adjustments aimed at curbing speculation, but most buyers are long-term investors or occupiers

APAC Realty continues to expand regionally, acquiring 51% of ERA Fajar and ERA Sky in Indonesia. ERA Indonesia and ERA Vietnam also reported improved results in 1H2025. ERA Singapore was appointed for 11 new projects totaling 5,426 units. In July–August 2025, 8 projects with 3,640 units launched, with 6 more (3,374 units) planned for the rest of 2025.

At S\$0.705, APAC Realty’s market cap is S\$250 million, trading at 14x forward PE and offering an attractive 7.6% FY25 yield. Consensus target price is S\$0.80 (14% upside). Lim & Tan Securities will host APAC’s management for a webinar on 18 Aug 2025.

Sector Leaders: Highest Yields, Lowest Valuations

Macro Market Insight: US, Hong Kong, and China Sectoral Trends

US equity strategists are maintaining a defensive portfolio allocation amid decelerating growth and elevated valuations. They remain neutral on both consumer discretionary and staples, having taken profits on cyclical exposure. Industrials, Financials, and Consumer Discretionary are favored for value and quality, supported by the recent stimulus package, while Healthcare faces headwinds from Medicare cuts and drug pricing regulations.

For China and Hong Kong, copper smelters are at a turning point due to ore shortages and government efforts to curb overcapacity and deflation. Output is projected to fall from record levels, with further drops expected, coinciding with increased state focus on industry rationalization. Official July production data is pending. The aluminium and steel industries have seen capacity caps and reduced output, but copper has faced fewer restrictions due to its importance in high-tech and green manufacturing.

In the US, the Philly Fed index rebounded in July (15.9 vs. -4.0 in June), with improvements in new orders, shipments, and employment, but margin pressure remains due to higher input costs and slowing sales. Forward capex intentions are flat, and inventories remain elevated.

Real retail sales growth remains positive but is slowing. Risk assets are priced for perfection, and defensive positioning is advised for now.

Key Corporate Actions and Share Transactions

Share Buybacks

Institutional and Retail Fund Flow Trends

For the week of 4 August 2025:

• Institutional investors: Net sell of S\$256.8m (vs. -S\$494.6m prior week)
• Retail investors: Net buy of S\$144.3m (vs. +S\$380.8m prior week)

Top Institutional Net Buys (S\$M)

• DBS: 60.8
• iFast Corporation: 40.1
• Yangzijiang Shipbuilding: 30.9
• Seatrium: 22.1
• City Developments: 19.0

Top Institutional Net Sells (S\$M)

• UOB: (171.1)
• SIA: (137.4)
• Sembcorp Industries: (53.1)
• OCBC: (40.1)
• CapitaLand Ascendas REIT: (25.7)

Top Retail Net Buys (S\$M)

• UOB: 214.5
• SIA: 158.8
• Sembcorp Industries: 74.8
• OCBC: 30.4
• CapitaLand Ascendas REIT: 21.2

Top Retail Net Sells (S\$M)

• DBS: (142.4)
• Yangzijiang Shipbuilding: (71.8)
• iFast Corporation: (43.3)
• Seatrium: (37.4)
• City Developments: (14.5)

Dividend Announcements and Key Dates

SGX Watch-List: Latest Additions and Ongoing Monitoring

There are 32 companies currently on the SGX watch-list, including recent additions such as Addvalue Technologies, Renaissance United, Telechoice, Tiong Seng Holdings, Global Invacom Group, Green Build Technology, Keong Hong, and Camsing Healthcare.

Conclusion: Singapore Market Poised for Further Upside, With Sector Leadership and Corporate Action in Focus

Singapore’s equity market remains robust, led by transformative moves from blue chips like Keppel and strong earnings from key players like APAC Realty. Sector rotation, active fund flows, and a healthy corporate action calendar underpin the market’s momentum. With a rich pipeline of residential projects, rising dividends, and ongoing industry transformation, the Singapore market stands out as a compelling destination for investors seeking yield, growth, and strategic value in Asia.