Market Focus Daily: Wednesday, July 2, 2025
Synopsis: Market Focus Daily is a closing bell roundup by The Business Times that looks at the day's market movements and news from Singapore and the region.
Written and hosted by: Emily Liu (emilyliu@sph.com.sg)
Produced and edited by: Chai Pei Chieh & Claressa Monteiro
Produced by: BT Podcasts, The Business Times, SPH Media
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Business Times
3 hours ago
- Business Times
Brics set to condemn ‘coercive' tariffs, draft statement shows
[CAIRO] Brics leaders are poised to adopt a position at odds with US President Donald Trump on trade tariffs, aspects of conflict in the Middle East and the need to tackle climate change. In a draft statement prepared for their meeting in Brazil starting on Sunday (Jul 6), leaders will voice 'serious concern' about unilateral tariff and non-tariff measures, according to two officials from participating governments familiar with the ongoing deliberations. The government chiefs will also condemn the imposition of 'unilateral coercive measures that are contrary to international law', the officials said, asking not to be named since the discussions are private and the text of the final communique could still change. While not mentioning the Trump administration by name, the leading emerging-market nations are clearly referring to the US in the wake of the US president's unilateral tariffs imposed on countries worldwide. Facing punitive levies, nations including founding Brics member India are racing to strike deals with the US ahead of a Jul 9 deadline Trump has given for the tariffs to take effect. At the same time, the reluctance to directly challenge Trump reflects divisions within the bloc, with some, such as India, closer to Washington than others, amid concerns that Brics could become a vehicle for its largest member economy, China. Even so, Brics nations hosted in Rio de Janeiro by Brazilian President Luiz Inacio Lula da Silva are at cross purposes with the Trump administration on aspects of policy. That includes in the Middle East, with multiple references proposed to Israel's war against Hamas in Gaza, according to the draft text. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Grave concern' The leaders may express 'grave concern' about the situation in Palestinian territory, citing the resumption of Israeli attacks and the obstruction of the entry of humanitarian aid into Gaza, according to the officials. The language under consideration includes a condemnation of the use of starvation as a method of warfare – a reference to charges levelled at Israel, which it rejects. They are also deliberating a call for the full withdrawal of Israeli forces from the Gaza Strip, and expressing their opposition to the forced displacement of any of the Palestinian population from their territory. That kind of statement – if the language appears in the final text when leaders wrap up their two-day summit on Jul 7 – is likely to be an unwelcome intervention as Israel Prime Minister Benjamin Netanyahu prepares to meet with Trump at the White House the same day. Brics leaders are also expected to express their backing for the Paris climate agreement – a pact which Trump unilaterally abandoned – while calling for global governance of artificial intelligence (AI) to mitigate potential risks, according to the officials. The US is leading the race to develop AI and is pushing back against attempts at regulation by the likes of the European Union. The Brics nations are Brazil, Russia, India, China and South Africa, as well as more recent full members Egypt, Ethiopia, Iran, Indonesia and the United Arab Emirates. The declaration will welcome a further 10 nations as partner countries, including Kazakhstan, Nigeria, Vietnam and Thailand. BLOOMBERG
Business Times
3 hours ago
- Business Times
Nassim Hill origins, Michelin-starred alumni: Shatec over the years
[SINGAPORE] With alumni ranging from Jimmy Lim – the first Singaporean to earn three Michelin stars – to Far East Hospitality CEO Arthur Kiong, long-established hospitality institute Shatec has taught 40,000 students since its founding in 1983. But the school is now scaling down its operations, shutting its Orchard satellite campus – barely a year-and-a-half since it opened – and putting up its main Bukit Batok campus for sale. The Business Times traces the history of the region's first dedicated hospitality school. Jul 2, 1983: The Singapore Hotel Association establishes the Singapore Hotel Association Training and Education Centre (Shatec) at 24 Nassim Hill, with the official opening attended by Minister of State for Education Tay Eng Soon. The school is set up with grants from the Singapore Tourist Promotion Board and support from the Singapore Development Federation and National Productivity Board. It aims to train new hospitality talent and upskill industry professionals. Its initial courses were developed in collaboration with Swiss hospitality school Ecole hoteliere de Lausanne. 1990: Plans to incorporate industry training schools, such as Shatec, under Temasek Polytechnic – which is being built – are 'being shelved, but not dropped altogether', says Dr Tay, who is now senior minister of state for education. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up April 1990: Shatec announces plans to grow its capacity to 4,000 training places in the next five years, up from the current 1,300; and its full-time student population to 1,500, from 500. June 1990: The institute launches Singapore's first diploma course in tourism. 1992: Shatec wins the Singapore Tourist Promotion Board's Outstanding Contribution to Tourism award. 1993: Shatec launches plans to train and certify part-timers to tackle manpower crunch. 1993-1994: The school opens a campus in Mount Sophia, after Methodist Girls' School moves out of the space in 1993. 1999: Shatec wins Tourism Host of the Year in the hotel category of the Singapore Tourism Awards. 2000-2001: The institute moves out of its Nassim Hill and Mount Sophia locations, and into a new campus in Bukit Batok. 2004: Shatec launches a new College of Culinary Arts, and introduces a new event-catering course alongside its existing diploma in culinary skills and diploma in pastry and baking. April 2004: The World Gourmet Summit recognises Shatec as Culinary Institution of the Year. 2004: Shatec gains the Singapore Quality Class for Private Education Organisations accreditation. 2006: It attains Workforce Skills Qualifications (WSQ) accreditation from the Workforce Development Agency, which came before SkillsFuture Singapore. 2008: Shatec rebrands itself as Shatec Institutes, and establishes seven new institutes: Institute for Hosting; Institute of Leisure & Tourism; Institute of Lodging; Institute of Restaurants & Bars; Institute of Wines & Spirits; Institute of Culinary Arts; and Institute of Pastry & Baking. 2009: It becomes the first Asian institution to be inducted into the World Gourmet Summit's Hall of Fame, for winning the Culinary Institution of the Year award for four consecutive years. 2012: SkillsFuture Singapore appoints Shatec as a continuing education and training (CET) centre for the tourism and food and beverage industries, with funding available for up to 90 per cent of the fees for WSQ programmes. The institute also opens a new city-centre venue in Middle Road, offering part-time and skills-upgrading courses. 2014: Shatec signs agreements to formalise collaborations with overseas schools Meiho University and The Hong Kong Polytechnic University's School of Hotel and Tourism Management. Jan 15, 2024: The institute opens a satellite campus in the Singapore Tourism Board's (STB) Tourism Court building in the Orchard area. 2024: Supported by Enterprise Singapore, STB and the Saudi Arabian government, Shatec sets up its first overseas school in Riyadh. This is under a licence agreement with Modern Hospitality Company, a joint venture by Saudi companies that will fund and run the school. August 2024: Shatec announces its pivot from pre-employment training to CET, to refocus on mid-career training and reskilling. January 2025: A new management team takes over. March 2025: The Sapling, a training restaurant for Shatec students, shutters its doors as the school 'transitions away from full-time programmes'. Apr 1, 2025: Shatec begins 'a business containment exercise' that involves the scaling down of operations and the retrenchment of 42 staff members. May 2025: CBRE puts Shatec's Bukit Batok campus up for sale, with an approximate value of S$18 million. End-June 2025: Shatec closes its Orchard campus.
Business Times
3 hours ago
- Business Times
Managing risks and finding opportunities in fixed income
IN THE current economic landscape, global fixed-income markets face significant uncertainty and volatility. Investors are contending with fluctuating growth rates, inflationary pressures, and unpredictable policy decisions. Tariffs and diverging macro policies across regions add complexity to the investment environment, necessitating a strategic approach to managing risk and identifying opportunities. Investors are concerned primarily with the implementation of macro policies. The current policy environment, especially in the US, is marked by significant uncertainty, leading to increased market anxiety. Central banks are downgrading growth expectations and are likely to continue gradually cutting rates. However, the US Federal Reserve is expected to lag behind other central banks in adjusting monetary policy. On the fiscal side, the reconciliation Bill in the US is under significant scrutiny for its future fiscal deficit implications, potentially impacting market dynamics, capital flows and the American currency's strength. Concerns over US debt levels and potential volatility are shaping the global fixed-income market. The substantial amount of public debt raises questions about leverage and transparency in these markets. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Investors are wary of crowded trades, which could trigger forced selling and rapid unwinds of leverage, creating challenging conditions – particularly in the illiquid over-the-counter fixed-income market. US downgrade and de-dollarisation Macroeconomic uncertainty is anticipated to peak in late summer, coinciding with the release of hard data and the resolution of debt ceiling negotiations. The recent downgrade of the US by Moody's poses a longer-term philosophical question rather than a present danger to Treasury investors, initiating discussions about its implications. It may not significantly alter daily investor activities – particularly as two other large rating agencies have also downgraded the US – but it requires adjustments for some institutional clients with guidelines on AAA securities. It challenges the conventional view of what constitutes a flight to safety or quality, as the US Treasury market is traditionally seen as the epitome of safety, and raises questions about what determines the nature of risk-free assets. The greenback will be under more pressure than Treasuries, but be wary of being materially underweight given the downward correction to date. The secular path towards de-dollarisation may be difficult to change, meaning the currency may remain under long-term pressure. Reducing trade deficits in the US will also reduce the capital surplus, leading to fewer dollars going out of the US, and therefore fewer dollars going back into investments there. Despite this, it is too extreme to conclude that the greenback will lose its reserve currency status any time soon as there are few, if any, viable alternatives. Plus, the majority of global contracts are denominated in US dollars. Being short, the US dollar is a crowded trade, and there may be upside surprises in the face of an economic downturn. Tight valuations put a premium on liquidity to make the most of future opportunities. A period of lower growth and overall lower inflation is supportive of investment-grade credit, but spreads have generally recovered most of the wider moves since the end of the first quarter, so we are comfortable with long, albeit defensive, exposure in this market. Given the asymmetry of risk-adjusted returns when spreads are considerably tight, maintaining liquidity in portfolios is key to taking advantage of potential future dislocations in the market. Positioning is stretched in many areas of the market, and an unwind of crowded trades could lead to some disruption due to the more illiquid nature of fixed-income markets. Portfolio positioning The global fixed-income market offers a broad universe for investment. European markets are drawing interest due to favourable valuations and continued rate cuts by the European Central Bank. Emerging markets present opportunities, particularly in regions with agreeable rate paradigms. Within the US, certain segments such as asset-backed securities and short-duration high yield remain attractive, with the Fed likely to be slower than other central banks to reduce rates. Capitalising on these opportunities requires a strong bottom-up research approach to identify good credits and manage downside risk in a volatile environment. Investment grade While spreads have fallen almost to pre-Liberation Day levels and reduced dispersion, specific opportunities are emerging across sectors in both Europe and the US. Utilities are particularly attractive due to their relatively cheap valuations, despite significant issuance driven by the push for decarbonisation. The need for substantial capital expenditure in utilities and potential growth from advancements in artificial intelligence and increased energy demands are likely to provide interesting investment opportunities, especially through the new issue market. Similarly, European banks, especially subordinated debt, are gaining interest due to strong stock performance and anticipated European economic growth from infrastructure and defence investment plans. They have also lagged somewhat in the recent recovery rally. Defensive sectors such as capital goods, food and beverage, and healthcare continue to offer better visibility and cash-flow generation, making them preferable over cyclical sectors such as retail and autos. Emerging market debt Emerging market hard-currency debt has traditionally been viewed as a less risky option compared to local currency debt due to its lower volatility and risk profile. However, hard-currency spreads have recovered the widening, and outperformed other credit asset classes such as high yield. Given the weakness in the US dollar and the attractiveness of some local rates markets, we are finding interesting risk-adjusted return opportunities in this area. Regional diversification within emerging markets is essential for optimising returns and managing risks. For example, Latin America could offer attractive investment opportunities due to upcoming electoral cycles that may result in favourable macro policies. Duration Globally, there are various opportunities to be long duration, depending on the country and part of the curve. In the US, the five-year and 10-year Treasury curves are attractive, while in Australia and South Korea, the front end of the curve is more appealing. European exposure – particularly in periphery markets such as Spain, Italy and Greece – provides still-attractive carry, with occasional interest in some supranational issuance, in particular the European Union at the long end of the curve. In the United Kingdom, both the front and long ends of the curve are attractive. This diversity in fixed-income markets allows investors to capitalise on dislocations and opportunities across different curves and regions. Stay focused and flexible The global fixed-income market is experiencing heightened uncertainty and volatility due to macroeconomic factors and policy decisions. This environment presents risks but also opportunities for investors who can strategically manage these challenges. A strong research focus and adaptability to changing conditions are essential for identifying attractive opportunities and mitigating risks to capital. Staying focused and vigilant about potential risks while being flexible in investment strategies is crucial for effectively navigating the evolving market dynamics. The writer is co-chief investment officer of fixed income at MFS Investment Management
