CNA938 Rewind - Stock take today: EU-US preliminary deal, US week ahead
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CNA
an hour ago
- CNA
Money Talks - How to choose the right mobile phone plan
No contract, large data packages and free overseas internet roaming. These are just some of the perks that mobile virtual network operators (MVNOs) in Singapore are offering. Dinesh Dayani of discusses what to watch for in the fine print and how to know when it's finally time to make the switch.
Business Times
an hour ago
- Business Times
DBS, OCBC, UOB Q2 results likely to be weighed down by lower interest rates
[SINGAPORE] The trio of local banks will likely post weaker results for the second quarter of 2025, weighed down by lower net interest income from falling interest rates, analysts said. They are expected to post their Q2 financials next month, beginning with OCBC on Aug 1 and followed by DBS and UOB on Aug 7. Net interest margins (NIMs) will probably be 'materially lower' in Q2, said Thilan Wickramasinghe, head of research and regional financials at Maybank Securities Singapore. He noted that the Singapore Overnight Rate Average (Sora) was down 50 basis points – due to 'massive' domestic liquidity, partly because of safe haven inflows – while the Hong Kong Interbank Offered Rate (Hibor) was at its lowest since 2022. The Sora decline provided only partial relief in funding costs, as banks 'weigh off preserving market share', he said. DBS Group Research analyst Lim Rui Wen also expects NIMs to fall quarter on quarter by a high single digit, due to the lower Sora and Hibor. 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 The rates' impact will likely be more pronounced as more loans get repriced against reduced benchmark rates throughout Q2, she added. However, she noted that OCBC's and UOB's repricing of their fixed-deposit and flagship deposit account interest rates should buffer falling asset yields in subsequent quarters. Wickramasinghe also pointed out that loan growth was better than expected in Q2, probably due to front-loading demand ahead of the expiry of US President Donald Trump's tariff moratorium. While this may partially offset downsides in net interest income, it is unlikely to arrest sequential decline, the researcher said. Trump impact Analysts also said that Trump's 'Liberation Day' tariffs in April likely weighed on market sentiment, impacting wealth management fees in turn. Tay Wee Kuang, an analyst at CGS International, said that macroeconomic uncertainty could continue to dampen fee income in the second half of the year, despite equity market sentiment having slowly recovered. Nevertheless, Lim of DBS expects wealth management income to remain a tailwind for Singapore banks in the medium term, as wealth management activity began recovering in May. This is also supported by ongoing growth in assets under management (AUM), she said. 'The investible portion of AUM is expected, as clients reallocated funds from fixed-deposit rates and (treasury-bill) rates, which continue to see declining rates through Q2.' Wickramasinghe likewise expects sequential improvements in wealth management fees, given falling domestic benchmark rates and risk-on market conditions. He added that significant volatility around foreign exchange, trade and interest rates would likely have supported trading income in Q2, which could surprise on the upside, especially for DBS and UOB. Higher credit costs Meanwhile, the three banks' credit costs could trend towards the higher end of their respective 2025 guidance, due to weakness across Asean economies such as Thailand and Indonesia , said Tay. 'However, we do not expect total credit costs to change drastically quarter on quarter, as we believe the pre-emptive general provisions recognised by the Singapore banks in Q1 should remain sufficient amid the current credit cycle,' he added. Ongoing reviews of second-order impacts from the US tariffs may also lead the banks to maintain or increase their general provision buffers, said Lim. Therefore, general provisions write-backs are unlikely this year, she noted. CGS International and Maybank Securities kept their 'neutral' call on the Singapore banking sector, with Tay noting that the lenders lack growth catalysts in an uncertain economic outlook. The analysts expect UOB to restore its guidance for 2025, which it had suspended in Q1. They are also awaiting more clarity from OCBC on its strategy, following its failed bid to privatise its insurance arm, Great Eastern . Clarity around returns may also take longer to resolve due to the lender's 'unexpected leadership change ', Wickramasinghe said. But Lim, who has 'hold' calls on OCBC and UOB, expects the banks' dividend yields of up to 6.5 per cent to continue supporting share prices. 'As asset quality remains largely benign, and dividend yields stay attractive, comparable to Singapore real estate investment trusts, we expect share prices to remain well-supported in a low interest-rate environment and due to the safe haven appeal of the Singapore dollar,' she said.
CNA
2 hours ago
- CNA
Commentary: Prabowo wants a global role for Indonesia
SURABAYA, Indonesia: Indonesian President Prabowo Subianto arrived at the BRICS Summit in Brazil this month, eager to showcase Indonesia's growing presence on the global stage. Instead, his BRICS debut was quickly overshadowed by his United States counterpart, Donald Trump, announcing that his administration would proceed with a 32 per cent general tariff on Indonesian goods entering the US, first announced in April. A day later, Mr Trump announced an additional 10 per cent would be slapped on all BRICS members, including Indonesia, its newest member. Although Mr Prabowo - who took on the top job just nine months ago - later managed to negotiate the tariff down to 19 per cent, describing it as the result of a ' tough negotiation ' during a phone call with Mr Trump, the episode cast a pall over his broader efforts to elevate Indonesia's foreign policy as a hallmark of his presidency. Indonesia's accession to BRICS in January marked a turn towards a more assertive foreign policy, a clear departure from Mr Prabowo's predecessor, Joko Widodo, who had prioritised domestic issues. Ahead of the BRICS summit, the Indonesian foreign ministry had described Mr Prabowo's intent as positioning Indonesia as a "bridge-builder" amid growing global uncertainties. BIG FISH IN A BIG POND Rather than anchoring Indonesia's foreign policy to ASEAN centrality as his predecessors did, Mr Prabowo, through BRICS and other efforts, is clearly seeking bigger ponds where Indonesia may become a significantly bigger fish. Just as Mr Widodo sought to be remembered for transforming Indonesia's physical infrastructure, Mr Prabowo appears keen on being remembered as a geopolitical heavyweight. His participation in the St Petersburg International Economic Forum (SPIEF) in June, alongside Russian President Vladimir Putin, was telling. At that forum, Mr Prabowo claimed Indonesia's BRICS accession process had been one of the fastest of all countries. He also explained his decision to attend the SPIEF instead of the G7 Summit in Canada to which he had been invited as a guest. "It is not because I didn't respect the G7, but because I gave my commitment to attend this forum before they invited us.' He added that Indonesia, by tradition, has always been non-aligned and that it "respect all countries'. A REALIST Mr Prabowo's interest in geopolitics is not new. As defence minister (from 2019 to 2024), he drew fire after pitching a controversial peace plan for the war between Russia and Ukraine at the Shangri-La Dialogue in 2023. His proposal included the creation of a demilitarised zone and an eventual United Nations-sponsored referendum in the 'disputed territories'. Ukraine's then foreign ministry spokesperson, Oleg Nikolenko, rejected it outright, saying there were no disputed territories and that Russia's withdrawal from all the occupied territories was non-negotiable. That episode revealed Mr Prabowo's realist outlook and the priority he gives to hard power in international relations over international laws and conventions. That posture has continued into his presidency. During a press conference with French President Emmanuel Macron in Jakarta in May, he declared: "We must acknowledge and guarantee Israel's rights as a sovereign country," adding a caveat that "Indonesia has stated that once Israel recognises Palestine, Indonesia is ready to recognise Israel". No previous Indonesian president has dared to offer an explicit promise to recognise the state of Israel, let alone throwing in some form of security guarantee. Yet, apart from his blunt language, Mr Prabowo had in fact barely shifted Indonesia's traditional stance vis-a-vis Israel. It has been a key element of its foreign policy to withhold diplomatic recognition and avoid ties with Tel Aviv as long as there is no independent Palestinian state. Now he has appeared to make, by the tone of his language at least, Palestine's independence a foreign policy priority. He has, moreover, signalled his willingness to work with Israel to achieve this objective, even if he has never elaborated how. In April, Mr Prabowo underlined his resolve to nudge along a resolution of the Israel-Palestine conflict by offering to temporarily shelter 1,000 Palestinians impacted by the war in Gaza. If carried out, this will represent Indonesia's most concrete commitment to the Palestinian cause to date. Central to Mr Prabowo's approach is his ambition to usher in an age in which Indonesia 'will rise as a great country'. In this, he echoes Indonesia's first president, Sukarno, who had sought to bypass the two-bloc nature of the post-war world by drawing the non-aligned countries together as a third force. Mr Prabowo's real challenge remains how to balance Indonesia's role as a middle-ranking power amid global power rivalries. But what is becoming increasingly clear is that he will use all the influence at his disposal to raise Indonesia's prominence and stature and, by extension, the potential to make his own personal legacy more memorable than those of his predecessors.
