Lim & Tan Securities Pte Ltd Date of Report: 11 April 2025
Market Turbulence: Earnings Deterioration and Economic Recession Fears
The global financial markets are bracing for a severe deterioration in earnings as the new reporting season begins. Stock traders are worried that if fears materialize and the S&P 500 falls into a profit recession, there’s more risk ahead for equities. Banks are set to kick off the first-quarter earnings season on Friday, setting the tone for the rest of corporate America.
Global Market Update
On Thursday, the S&P 500 fell 3.5%, and the tech-heavy Nasdaq composite decreased 4.3%, while the Dow Jones moved down 2.5%. The Philadelphia Fed Manufacturing index beat expectations but still fell from 18.1 to 12.5, significantly down from January’s lofty 44.3 reading. Most activity components slowed except for current employment and work hours.
Company Analysis
CapitaLand Investment / CLI
Market Update: CapitaLand Investment (Ascott) announced plans to double its portfolio in India to 12,000 units by 2028, up from about 5,500 units at the end of 2024.
Growth Prospects: The company plans to grow its operational portfolio in India by almost 60%, expanding from the current seven to 11 properties. This includes the debut of Ascott Ireo City Gurugram, marking the inaugural property under the company’s namesake Ascott brand in India.
Financials: CLI’s market cap stands at S$12.5bln and currently trades at 17.2x forward PE and 0.9x PB, with a dividend yield of 4.8%. Consensus target price stands at S$3.48, representing 39.2% upside from the current share price.
Ascott’s Expansion Plans
Ascott’s Chief Executive Officer, Kevin Goh, spoke on the topic of ‘Redefining Global Living’ at the 20th Hotel Investment Conference – South Asia (HICSA) in Mumbai. The company is riding on a strong momentum in the first quarter of 2025 with three signings in Goa, Lucknow, and Thanjavur.
India Hospitality Market: Ascott is leveraging its diverse portfolio of 14 brands across multiple typologies to attract Indian travelers to experience its global network of properties.
Growth Potential: With a rapidly growing middle class, increasing disposable incomes, and improving infrastructure, India’s dynamic economic landscape is unlocking immense opportunities for its travel and hospitality sectors.
DBS Bank, Frasers Logistics Trust, Mapletree Industrial Trust, and UOB Bank
Top Gainers:
DBS Bank: 7.78
Frasers Logistics Trust: 7.61
Mapletree Industrial Trust: 7.57
UOB Bank: 6.73
Highest Consensus Forward Div Yield (%):
Hongkong Land: 0.30
Jardine Matheson: 0.41
UOL Group: 0.41
City Developments: 0.46
Mapletree Pan Asia Comm Trust: 0.65
Lowest Trailing EV/EBITDA (X)
Top Gainers:
Yangzijiang Shipbuilding: 2.54
Genting Singapore: 5.08
Jardine Cycle & Carriage: 5.79
DFI Retail Group: 6.01
SATS: 7.97
SG Market Summary and Major Market Indices
FSSTI Index: 3,577.8 (5.4% 1D, -9.9% MTD, -5.5% YTD)
INDU Index: 39,593.7 (-2.5% 1D, -5.7% MTD, -6.9% YTD)
SPX Index: 5,268.1 (-3.5% 1D, -6.1% MTD, -10.4% YTD)
Share Transactions
Company No. of Shares Price ($) Cumulative Purchases Of Mandate (%)
Oxley 600,000 0.066 6,034,500
Capitaland Invest 3,000,000 2.45 103,208,900
Global Investment Limited 300,000 0.12 59,773,400
Venture 15,000 10.76 2,498,300
Yangzijiang Shipbuilding 2,000,000 1.95 9,000,000
SGX 150,000 12.13 1,185,000
Pan United Corp 60,000 0.60 2,912,400
DBS 700,000 37.23 3,730,000
SGX Watch-List (List is Not Exhaustive)
32 Companies Under SGX Watch-List:
Amos Group: 06-Jun-23
Ascent Bridge Ltd: 04-Dec-19
ASTI Holdings: 06-Jun-19
British And Malayan Hldgs: 06-Jun-23
CH Offshore: 06-Jun-23
Cosmosteel: 05-Jun-18
Market Insights and Recommendations
Defensive Positioning: BCA Research advises a defensive positioning in anticipation of an upcoming USA/Global recession this year. Their S&P 500 target is 4,400.
Earnings Deterioration: Stock losses average over 30% when grim scenarios are included. The same exercise via valuations points to a similar takeaway. Average forward price-to-earnings ratio in prior profit recessions has been ~17.6 — way below the index’s current level of 18.8.
Share Buybacks and Dividends
Share Buybacks:
DBS: 700,000 shares, 37.23 price, 3,730,000 cumulative purchases, 4.4% of current buy-back mandate
UOB: 400,000 shares, 33.21 price, 4,500,000 cumulative purchases, 5.4% of current buy-back mandate
Dividends and Special Distributions:
DBS Group Holdings Ltd: 60 cents final, 7 Apr 16 Apr
Yangzijiang Financial Holdings Ltd: 3.45 cents, 24 Apr 15 May
OCBC: 41 cents final & 16 cents special, 25 Apr 9 May
