OCBC Investment Research

25 Apr 2025

Navigating Market Turbulence: A Deep Dive into Key Singaporean and Chinese Equities

Market Overview

• Stocks experienced an upswing, primarily driven by technology shares, as the market digested recent remarks from Federal Reserve officials regarding potential interest-rate cuts. [[1]]
• Investors responded to a wave of earnings reports, with varied outcomes: some companies declined following disappointing results, while others saw gains despite revised, lower outlooks. [[1]]
• US-China trade relations remained a focal point, with hopes for the Trump administration to ease tariffs through new agreements. [[1]]
• The S&P 500 surged by 2.03%, and the Nasdaq Composite increased by 2.74%. [[1]]
• The Dow Jones Industrial Average, despite a 6.6% decrease in IBM shares, rose by 486.83 points (1.23%), closing above the 40,000 mark for the first time since April 15. [[1]]
• The Cboe VIX Index remained around 26. [[1]]
• Treasury yields decreased amidst expectations of earlier rate cuts by the Federal Reserve to avert a potential recession. [[1]]
• Governor Christopher Waller suggested that monetary easing might be implemented if tariffs lead to significant job losses. [[1]]
• Cleveland Fed President Beth Hammack indicated that action could be taken as early as June if there is clear evidence of the economy’s direction. [[1]]
• Applications for unemployment benefits showed a slight increase, indicating a stable labor market. [[1]]
• Sales of previously owned homes in March saw the largest drop since 2022. [[1]]
• Durable goods orders in March surpassed expectations due to tariff front-running in the aircraft sector. [[1]]
• President Donald Trump mentioned ongoing trade discussions with China, following Beijing’s denial of any negotiation and demands for the US to retract all unilateral tariffs. [[1]]
• The mixed first-quarter earnings reports revealed that businesses across various sectors are raising prices and expressing uncertainty about the future due to the trade war and policies initiated by the Trump administration. [[1]]
• The market’s reaction to guidance changes has been somewhat positive, with earnings reports potentially sustaining market momentum in the absence of concrete trade agreements. [[1]]

European Markets

• The Stoxx Europe 600 Index increased by 0.36% after an initial drop of 0.8% in early trading. [[1]]
• The automotive sector led the gains, boosted by robust monthly sales data. [[1]]
• Carmakers’ shares were also supported by President Trump’s plans to exempt car parts from tariffs on imports from China. [[2]]
• Investors are exercising caution due to potential policy reversals, especially following China’s denial of ongoing trade agreement talks with the US. [[2]]

Asian Markets

• The MSCI Asia Pacific Index fell by as much as 0.5%, with Taiwan, South Korea, and Hong Kong markets all declining. [[2]]
• Japan’s market bucked the trend, supported by carmakers, driven by news of potential US tariff reductions targeting the auto industry. [[2]]

Singapore Market Statistics

The following table summarizes the Singapore market statistics:

• Straits Times Index: 3,831.9 (-0.4, 0.0%) [[2]]
• FTSE ST Financials: 1,519.9 (-9.8, -0.6%) [[2]]
• FTSE ST REITs: 640.5 (-4.5, -0.7%) [[2]]
• FTSE ST Real Estate: 620.7 (-2.8, -0.5%) [[2]]
• Volume (m): 1,176.8 (-280.5, -19.2%) [[2]]
• Turnover (m): 1,586.1 (0.0, 0.0%) [[2]]
• 52 week range: 3,198.4 – 4,005.2 [[2]]
• Gainers / losers: 254 / 279 [[2]]

World Indices

The following table summarizes key world indices:

• S&P 500: 5,484.8 (108.9, 2.0%) [[2]]
• DJI: 40,093.4 (486.8, 1.2%) [[2]]
• Nasdaq Comp: 17,166.0 (458.0, 2.7%) [[2]]
• FTSE 100: 8,407.4 (4.3, 0.1%) [[2]]
• STOXX Europe 600: 518.6 (1.8, 0.4%) [[2]]
• Nikkei 225: 35,039.2 (170.5, 0.5%) [[2]]
• Hang Seng Index: 21,909.8 (-162.9, -0.7%) [[2]]
• SHSE Comp Index: 3,297.3 (0.9, 0.0%) [[2]]
• SZSE Comp Index: 1,909.7 (-13.7, -0.7%) [[2]]
• SHSE SZSE CSI 300: 3,784.4 (-2.5, -0.1%) [[2]]
• KLCI: 1,506.5 (5.3, 0.4%) [[2]]
• JCI: 6,613.5 (-20.9, -0.3%) [[2]]
• SET: 1,146.9 (-6.9, -0.6%) [[2]]
• KOSPI: 2,522.3 (-3.2, -0.1%) [[2]]
• TWSE: 19,478.8 (-160.3, -0.8%) [[2]]

FX & Commodities

The following table summarizes foreign exchange and commodities market data:

• USDSGD: 1.3113 (0.4%) [[2]]
• USDJPY: 142.63 (0.6%) [[2]]
• USDCNY: 7.289 (0.0%) [[2]]
• USDHKD: 7.759 (0.0%) [[2]]
• WTI Crude USD/bbl.: 62.79 (0.8%) [[2]]
• Brent USD/bbl.: 66.55 (0.7%) [[2]]
• Gold USD/oz.: 3,349.4 (1.9%) [[2]]
• Silver USD/oz.: 33.58 (0.0%) [[2]]

Research Ideas

Mapletree Logistics Trust (MLT SP) – Tough end to FY25

• 4QFY25 distribution per unit (DPU) decreased by 11.6% year-on-year (YoY) to 1.955 Singapore cents. [[2]]
• Portfolio occupancy slightly declined by 0.1 percentage points (ppt) quarter-on-quarter (QoQ) to 96.2%, but portfolio rental reversions were positive at +5.1%, or +6.9% excluding China. [[2]]
• Aggregate leverage ratio increased to 40.7%, with 81% of debt hedged. [[2]]

Key Observations

• MLT’s 4QFY25 results were soft, with gross revenue and net property income (NPI) falling by 0.8% and 1.6% YoY to SGD179.6m and SGD152.8m, respectively. [[2]]
• This decline was primarily due to weaker contributions from China and unfavorable FX movements (KRW, AUD, and JPY), partially offset by stronger performances from Singapore, Australia, and Hong Kong. [[2]]
• Borrowing costs increased by 4.0% YoY to SGD38.7m, leading to an overall DPU decrease of 11.6% YoY. [[2]]
• FY25 NPI edged down 1.5% to SGD625.3m, and DPU fell 10.6% to 8.053 Singapore cents, aligning with expectations. [[2]]
• China continued to be a drag, although negative rental reversions narrowed. [[2]]
• Overall portfolio occupancy saw a marginal decrease of 0.1 ppt QoQ to 96.2%, with declines in Vietnam, Malaysia, South Korea, and Singapore, offset by gains in Japan and China. [[2]]
• Australia and India maintained 100% occupancy rates. [[2]]
• China’s occupancy increased for the second consecutive quarter, which is encouraging. [[2]]
• Rental reversions in China were -9.4%, an improvement from -10.2% in 3QFY25. [[2]]
• Rental reversions were positive in other regions, with significant uplifts in Japan (+15.7%), Singapore (+7.0%), and South Korea (+4.7%). [[3]]
• Overall portfolio rental reversion was 5.1%, or 6.9% excluding China. [[3]]
• Approximately 85% of MLT’s revenue comes from tenants serving local markets, with only about 15% engaged in exports. A small percentage of this 15% is exported to the US. [[3]]
• For the China portfolio, over 90% of revenue is from tenants serving the domestic market (mostly e-commerce related), with exports to the US at a low single-digit level. [[3]]
• Occupancy rates and rental reversions in China are expected to remain stable, barring any significant economic deterioration. [[3]]
• MLT carried out an independent portfolio valuation exercise, resulting in a net fair value loss of SGD62.0m, primarily from properties in China, South Korea, and Singapore, partially offset by gains in other markets. [[3]]
• Aggregate leverage ratio increased from 40.3% (as of December 31, 2024) to 40.7%. [[3]]
• 81% of MLT’s total debt is hedged, and the overall cost of borrowing remained unchanged QoQ at 2.7% for the fifth consecutive quarter. [[3]]
• FY26 DPU forecast lowered by 4.2% due to updated FX assumptions and the removal of distributions from divestment gains. [[3]]
• Cost of equity assumption increased from 6.6% to 7.0% amid increased market volatility and potential negative impacts from reciprocal tariffs. [[3]]
• Fair value estimate is cut from SGD1.61 to SGD1.47. [[3]]

ESG Updates

• MLT’s ESG rating was upgraded due to improvements in its talent management practices, including a formal talent pipeline strategy. [[3]]
• MLT leads industry peers in green building efforts and is committed to achieving carbon neutrality for Scope 1 and 2 emissions by 2030, aligning with the Mapletree Group’s target of net-zero emissions by 2050. [[3]]
• Other targets include expanding self-funded solar energy generating capacity to 100 MWp by 2030 and achieving green certification for over 80% of its portfolio by gross floor area (GFA) by 2030 (45% as of September 30, 2024). [[4]]
• Recommendation: BUY. [[4]]

CapitaLand China Trust (CLCT SP) – In-line results but occupancy and FX risks may pose headwinds

• 1Q25 gross revenue and net property income (NPI) fell 6.1% and 6.6% year-on-year (YoY), respectively. [[4]]
• Tenants primarily serve domestic markets with limited direct US exposure. [[4]]
• Potential for further domestic consumption stimulus may benefit retail, but cautious sentiment and potential CNY devaluation present risks. [[4]]
• Lower fair value (FV) estimate of SGD0.715. [[4]]

Key Observations

• CLCT’s 1Q25 business update was relatively light on the financials, but rental income and NPI constituted 24.7% and 24.3% of initial full year forecasts, respectively. [[4]]
• Excluding the impact of a serviced office tenant that pre-terminated its lease at Singapore-Hangzhou Science Technology Park Phase II and supermarket upgrading at three of its malls, gross revenue and NPI would have declined by a smaller margin of 4.4% and 4.0% YoY, respectively. [[4]]
• Retail revenue slipped 2.7% YoY. [[4]]
• Retail occupancy remains healthy, notwithstanding a slight dip from 98.2% to 97.7% quarter-on-quarter (QoQ), while rental reversions came in at +0.5%. [[4]]
• 1Q25 shopper traffic grew 2.4% YoY but tenant sales slipped 2.4%; excluding the supermarket anchors undergoing upgrading works, tenant sales would have grown 0.7% YoY. [[4]]
• The Chinese government may announce additional stimulus measures to spur domestic consumption and cushion the impact from US tariffs, potentially benefiting CLCT’s malls. [[4]]
• Revenue from the business parks fell 9.6% YoY on lower occupancy, which dipped 3.9 percentage points (ppt) QoQ to 83.7%. [[4]]
• The occupancy drag came from Singapore-Hangzhou Science Technology Park Phase II (due to the aforementioned lease pre-termination), as well as Ascendas Innovation Towers. [[5]]
• Revenue from the logistics parks bucked the downward pressure, growing 3.3% YoY despite a 1.9ppt QoQ drop in occupancy to 95.7%. [[5]]
• Chengdu Shuangliu Logistics Park saw occupancy decline to 82.9% on lease expiries, but the remaining three assets enjoyed full occupancy. [[5]]
• CLCT’s gearing increased 0.7ppt from 41.9% as at 31 Dec 2024 to 42.6% as at 31 Mar 2025, but cost of debt remained stable QoQ at 3.51%, with 75% of debt on fixed rates. [[5]]
• Every 50bps increase in SGD rates would weigh on FY24 distribution per unit (DPU) by 1.2%, while every 50bps decline in CNY rates would uplift FY24 DPU by 1.2%. [[5]]
• Following a CNY600m 2.88% three-year bond issuance in Apr 2025, CLCT has increased its proportion of CNY-denominated debt to 41%, and is on track to achieving its target of 50% by year end. [[5]]
• Management shared that its retail malls primarily serve domestic customers, and its tenants have minimal reliance on US imports. [[5]]
• Its new economy assets largely focus on the domestic market, with few business park tenants and its new master lessee at Shanghai Fengxian Logistics Park having limited direct exposure to the US. [[5]]
• FY25 and FY26 DPU forecasts lowered by another 1.8% and 2.2%, respectively. [[5]]
• Cost of equity estimate increased by 22bps to around 9% to account for an uncertain macroeconomic backdrop and the risk of devaluation in the CNY to counter US tariffs. [[5]]
• Fair Value estimate is lowered from SGD0.76 to SGD0.715. [[5]]

ESG Updates

• CLCT’s ESG score was maintained in Jan 2025. [[5]]
• With a majority independent board, relevant expertise in its audit committee, and board-level oversight on its business ethics practices, CLCT leads global peers in overall governance practices. [[6]]
• There is room for improvement in terms of human capital management and green building efforts. [[6]]
• CLCT has great potential to tap into the growing demand for sustainable buildings and currently offers green leases to its tenants. [[6]]
• Recommendation: BUY. [[6]]

China/Hong Kong Insurers – Leveraging on longer-term demographic tailwinds

• Robust industry premium income growth in 2024, although a marginal decline was seen in 2M25. [[6]]
• A pullback in the 10Y Chinese government bond yield is a headwind to solvency ratios. [[6]]
• Leveraging on longer-term demographic tailwinds by focusing on AI and diversifying offerings; the preferred sector pick is Ping An-H. [[6]]

Key Observations

• China’s insurance sector recorded accelerated insurance premium income growth in 2024, rising 11.2% to CNY5,696b, compared to growth of 9.1% in 2023 and 4.6% in 2022. [[6]]
• 2025 started slowly, with overall insurance premium income registering a mild decline of 1.2% year-on-year (YoY) to CNY1,515b in 2M25. [[6]]
• The drag came from personal insurance (-2.2% YoY), which offset the 4.4% YoY increase from the property and casualty (P&C) segment. [[6]]
• Life insurance saw a 3.5% dip in premium income, while accident and health premium incomes were up 5.4% and 3.6%, respectively. [[6]]
• Weaker life insurance premium income was driven by slower jumpstart sales as some demand was brought forward to 2024 prior to guaranteed rate cuts on some traditional insurance products, coupled with a product transition period as insurers shift focus to more participating product sales. [[7]]
• Expect this softness to be temporary as the industry transitions towards higher quality development with better asset-liability management. [[7]]
• Claims and payments data for the entire industry jumped 21.8% to CNY2,301b in 2024 and increased by another 13.1% YoY to CNY600b in 2M25, mostly from personal insurance. [[7]]
• There are headwinds from a lower interest rate environment in China, as low yields typically raise concerns over insurer’s asset-liability matching. [[7]]
• Major insurers have a sizeable buffer in comparison to the minimum required solvency levels. [[7]]
• The insurance sector benefits from rising wealth and demographic tailwinds as an aging population and higher life expectancy rates increase demand for protection products, healthcare, and eldercare services. [[7]]
• China’s proportion of the population aged 65 and above increased from 15.4% in 2023 to 15.6% in 2024. [[7]]
• The use of artificial intelligence (AI) has been highlighted as a means to boost efficiencies, improve service quality, and reduce risks. [[7]]
• Although Chinese insurers are unlikely to be directly impacted by potential tariffs from the Trump administration, there will be second-order effects from weaker economic growth and volatile financial market conditions. [[7]]
• Recommend investors to position more defensively due to the continued low-interest-rate environment. [[8]]
• Preferred sector pick: Ping An-H [2318 HK; FV: HKD62.70]. [[8]]

Latest OIR Reports

The following table summarizes the latest reports issued by OIR:

• 1. 24 Apr 2025 SG Mapletree Logistics Trust Tough end to FY25 MLT SP BUY SGD 1.47 [[8]]
• 2. 24 Apr 2025 SG CapitaLand China Trust In-line results but occupancy and FX risks may pose headwinds CLCT SP BUY SGD 0.715 [[8]]
• 3. 24 Apr 2025 HK CH China/Hong Kong Insurers Leveraging on longer-term demographic tailwinds – – – [[8]]
• 4. 23 Apr 2025 SG Parkway Life REIT Solid growth PREIT SP BUY SGD 4.65 [[8]]
• 5. 23 Apr 2025 SG Keppel REIT Slight dip in distributable income KREIT SP BUY SGD 0.92 [[8]]
• 6. 22 Apr 2025 SG Nanofilm Technologies International Ltd Cloudy outlook largely priced in NANO SP BUY SGD 0.595 [[8]]
• 7. 22 Apr 2025 SG Keppel Infrastructure Trust Distributable income boosted by one-off divestment gain KIT SP BUY SGD 0.50 [[8]]
• 8. 22 Apr 2025 US Air Products and Chemicals Monitoring certain hydrogen projects APD US HOLD USD 265.00 [[8]]
• 9. 17 Apr 2025 SG Keppel DC REIT Strong positioning in Singapore a positive KDCREIT SP BUY SGD 2.35 [[8]]
• 10. 17 Apr 2025 US Tech Navigating complexities in the Technology sector – – – [[8]]
• 11. 15 Apr 2025 US Enphase Energy Dimmer outlook for the industry ENPH US BUY USD 70.00 [[8]]
• 12. 14 Apr 2025 – Global Banks Turn of fortunes as uncertainties weigh – – – [[8]]
• 13. 11 Apr 2025 HK CH China Longyuan Power Limited direct exposure to US tariffs 916 HK 001289 CH BUY HKD 8.00 CNY 19.80 [[8]]
• 14. 11 Apr 2025 CH China Strategy Higher volatility warrants a defensive bias – – – [[9]]
• 15. 10 Apr 2025 SG Singapore Exchange Ltd Expect increased trading activities from market volatility SGX SP BUY SGD 14.09 [[9]]
• 16. 10 Apr 2025 HK Hang Seng Bank Lingering asset quality concerns 11 HK BUY HKD 105.00 [[9]]
• 17. 10 Apr 2025 SG Starhill Global REIT A dull shine through the fog SGREIT SP HOLD SGD 0.460 [[9]]
• 18. 10 Apr 2025 SG Singapore Don’t waste a crisis – – – [[9]]
• 19. 9 Apr 2025 HK CH China Railway Group Undemanding valuations 390 HK 601390 CH BUY HKD 4.85 CNY 7.47 [[9]]
• 20. 8 Apr 2025 SG Nanofilm Technologies International Ltd Cloudy outlook NANO SP BUY SGD 0.595 [[9]]

STI Stocks Sorted by Market Capitalisation (US\$m)

The following table summarizes STI stocks sorted by market capitalization:

• DBS SP DBS Group Holdings Ltd SGD 42.34 91,587 1.2 5.2 7.1 11 11 11 10 9 0 19 [[9]]
• OCBC SP Oversea-Chinese Banking Corp Ltd SGD 16.54 54,791 1.1 5.3 6.2 9 10 10 7 10 1 18 [[9]]
• ST SP Singapore Telecommunications Ltd SGD 3.79 48,138 0.9 4.4 4.2 – 25 22 16 1 1 18 [[9]]
• UOB SP United Overseas Bank Ltd SGD 35.61 45,588 1.1 5.0 6.2 10 10 9 11 7 0 18 [[9]]
• STE SP Singapore Technologies Engineering Ltd SGD 7.32 17,239 0.8 2.3 2.5 32 27 24 13 1 1 15 [[9]]
• SIA SP Singapore Airlines Ltd SGD 6.62 15,118 1.0 7.2 4.7 7 9 14 2 10 2 14 [[9]]
• WIL SP Wilmar International Ltd SGD 3.14 14,978 0.7 5.1 5.6 13 10 9 5 8 1 14 [[9]]
• JM SP Jardine Matheson Holdings Ltd USD 41.98 12,642 0.7 5.2 5.3 – 8 7 5 2 0 7 [[9]]
• CICT SP CapitaLand Integrated Commercial Trust SGD 2.14 11,922 0.8 3.1 5.2 16 19 18 14 3 0 17 [[9]]
• SGX SP Singapore Exchange Ltd SGD 14.50 11,918 0.7 2.4 2.5 24 25 24 7 7 2 16 [[9]]
• CLI SP CapitaLand Investment Ltd/Singapore SGD 2.65 10,067 1.1 4.5 4.7 28 18 16 15 0 0 15 [[9]]
• HKL SP Hongkong Land Holdings Ltd USD 4.22 9,886 0.8 5.1 5.4 – 15 14 8 5 0 13 [[9]]
• THBEV SP Thai Beverage PCL SGD 0.51 9,666 0.7 4.8 5.2 12 11 10 12 1 0 13 [[9]]
• KEP SP Keppel Ltd SGD 6.59 9,248 1.1 5.1 5.4 15 13 12 11 0 2 13 [[9]]
• CLAR SP CapitaLand Ascendas REIT SGD 2.66 8,916 0.9 5.8 5.7 15 17 17 16 0 0 16 [[9]]
• SCI SP Sembcorp Industries Ltd SGD 6.47 8,807 0.8 3.5 3.8 11 10 10 12 0 0 12 [[9]]
• JCNC SP Jardine Cycle & Carriage Ltd SGD 25.76 7,812 0.7 5.7 5.4 8 7 7 0 2 3 5 [[9]]
• GENS SP Genting Singapore Ltd SGD 0.75 6,902 0.6 5.3 5.5 16 15 13 10 8 0 18 [[9]]
• YZJSGD SP Yangzijiang Shipbuilding Holdings Ltd SGD 2.18 6,655 0.9 5.4 3.9 7 7 6 9 0 1 10 [[9]]
• STM SP Seatrium Ltd SGD 1.93 5,043 1.3 0.8 1.1 43 18 12 9 0 0 9 [[9]]
• MPACT SP Mapletree Pan Asia Commercial Trust SGD 1.22 4,815 1.0 6.7 6.9 11 14 15 10 5 0 15 [[9]]
• MINT SP Mapletree Industrial Trust SGD 2.05 4,473 0.7 6.6 6.7 49 15 15 10 4 1 15 [[9]]
• MLT SP Mapletree Logistics Trust SGD 1.16 4,399 1.1 6.9 6.7 31 18 18 9 5 1 15 [[9]]
• UOL SP UOL Group Ltd SGD 5.80 3,713 0.9 3.1 3.1 14 13 12 6 1 1 8 [[9]]
• FCT SP Frasers Centrepoint Trust SGD 2.28 3,480 0.5 5.4 5.3 21 20 21 12 4 0 16 [[9]]
• CIT SP City Developments Ltd SGD 5.05 3,416 0.9 1.6 2.4 24 16 12 6 5 3 14 [[9]]
• DFI SP DFI Retail Group Holdings Ltd USD 2.43 3,303 0.9 4.3 4.6 – 13 12 7 1 0 8 [[9]]
• SATS SP SATS Ltd SGD 2.80 3,180 1.1 0.5 1.8 18 17 15 9 1 0 10 [[9]]
• FLT SP Frasers Logistics & Commercial Trust SGD 0.90 2,579 1.0 7.4 7.0 23 19 17 8 3 1 12 [[9]]
• VMS SP Venture Corp Ltd SGD 11.32 2,483 1.0 6.6 6.5 13 13 13 4 6 2 12 [[9]]