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13 minutes ago
- Yahoo
Singapore NODX surges 13% y-o-y in June, economists mixed on forecasts
Some analysts see that frontloading could dampen growth in the second half, compounded by potential drag from US reciprocal tariffs. Singapore's non-oil domestic exports (NODX) 13% y-o-y climb in the month of June on the back of continued frontloading ahead of US President Donald Trump's July 8 deadline has inspired largely neutral outlooks from economists. Economists Chua Hak Bin and Brian Lee Shun Rong at Maybank Securities (Maybank) have upgraded their 2025 NODX forecast to 4%, which they note implies a slower growth of 2.8% in the second half. At the same time, the pair are reiterating their 2025 gross domestic product (GDP) growth forecast of 3.2%. Chua and Lee had previously upgraded their GDP forecast to 2.4%, following stronger-than-expected GDP growth in the second quarter. RHB Bank Singapore's (RHB) Barnabas Gan and Laalitha Raveenthar have also upgraded their NODX forecast for the full year to 2.0% from an initial 0.0%. At the same time, they retain their 2025 GDP forecast at 2.0% Fellow economist from UOB Global Economics and Market Research (UOB) Jester Koh is keeping his 2025 NODX forecast of 1.0% to 3.0% unchanged, while Oxford Economics' Sheana Yue has kept her 2025 GDP projection of 2.0% growth unchanged. The 13.3% surge included a $1.3 billion contribution from gold, without which NODX growth would have come in at 3.4% y-o-y. Non-oil re-export (NORX) growth meanwhile grew 18.5% y-o-y. Chua and Lee note that Singapore's exports of semiconductors, specialised machinery and other electronic components have benefited from broadening artificial intelligence (AI) demand and exemptions from reciprocal tariffs. Around 61% of Singapore's exports to the US, by their estimates, are currently exempted from reciprocal tariffs, including semiconductors, electronics, pharmaceuticals and energy. Electronics NODX accelerated, growing 8% y-o-y on the back of double-digit expansions in integrated circuits (IC), personal computers (PC) and bare printed circuit boards (PCB). By market, demand climbed the most in Japan at 76.6%, Hong Kong at 45.9%, Indonesia at 29.8% and South Korea at 27.2%. Meanwhile, electronics NORX grew by 26.2% y-o-y in June, owing to PCs, ICs and telecommunications equipment. Aggregate NORX rose by 18.5% y-o-y, after a 16.2% increase in the preceding month, led by Taiwan at 96%, the US at 64.3% and Hong Kong at 26.7%. Growth in non-electronics exports climbed to 14.5% y-o-y, driven by non-monetary gold which leapt 211.9% y-o-y, specialised machinery at 31.4% y-o-y and lastly, other specialty chemicals at 20.1%. On the other hand, the export of pharmaceuticals and petrochemicals contracted 13.7% y-o-y and 10.2% y-o-y respectively in June, with the latter declining for the fourth consecutive month. NODX declines in Europe (EU), Thailand, Malaysia, US, Indonesia and Japan were offset by growth across Hong Kong at 54.4%, Taiwan at 28.3%, South Korea at 33% and China at 8.5%. 'Some exports may have been diverted from the EU during the 90-day reprieve, as manufacturing supply cannot be ramped up quickly to meet import demand,' write Chua and Lee. Exports to Europe, note Chua and Lee, will 'likely recover and catch up' following the oncoming US reciprocal tariffs effective August. They add: 'This will help offset and cushion any export slowdown to the US in the second half.' In June, NODX to Hong Kong at 54.4% and Taiwan at 28.3% were led by specialised machinery and semiconductor chips, while exports to South Korea were driven by specialised machinery at 77.9%, measuring instruments at 202.7% and PCs at 195.3%. Chua and Lee note that non-monetary gold was a prominent driver of exports to China and Hong Kong, with gold exports to China surged 2222% y-o-y in June. Excluding gold, NODX to China fell 3.3% y-o-y, for the ninth consecutive month, while gold exports to Hong Kong jumped 71.1% y-o-y. Overall, Maybank's Chua and Lee expect the Ministry of Trade and Industry (MTI) to upgrade its GDP forecast range for 2025 to 2% to 3%, once final numbers on the 2Q2025 GDP are released in August. They also expect Enterprise Singapore to upgrade its full year export forecast from the current conservative 1% to 3% range, as first half NODX growth came in higher than expected at 5.2%. Exports and manufacturing growth will likely slow after higher reciprocal tariffs for the region kick in on Aug 1, note Chua and Lee. According to them, positives that will mitigate the payback and severity of the second half export slowdown are relatively lower US tariffs, broadening global AI demand and US-China de-escalation with a probable extension of the US-China tariff truce beyond Aug 12. 'Singapore faces the lowest US reciprocal tariff in Asia, at about 5.1% in effective terms by our estimates, below the 10% baseline tariff rate due to the current exemptions,' write Chua and Lee. In the US, wholesale inventories have been rising modestly over the last few months as companies stock up, but US retail inventories have not shown any visible increase. On this, Chua and Lee write: 'We think that the US inventory overhang post-reciprocal tariffs may only last several months before companies have to replenish their stock and order more imports.' While they see export growth to 'likely moderate' in the second half, given the stronger-than-expected growth in the first half, Chua and Lee expect the Monetary Authority of Singapore (MAS) to maintain its current modest appreciation bias for the upcoming meetings. 'We lower our three-month Singapore Overnight Rate Average (SORA) forecast to 1.5% by end-2025 and 1.2% by end-2026, as safe haven flows continue to dampen domestic interest rates,' write Chua and Lee. Should the US Federal Reserve (US Fed) cut rates in the second half, this could also drive short-term interest rates lower, the pair add. Looking ahead, UOB's Koh sees that 'payback' from earlier frontloading is likely to dampen growth in the second half, compounded by potential drag from US reciprocal tariffs. 'However, in our view, the eventual growth 'payback' may be more pronounced in trade-related services rather than in manufacturing, as frontloading seems to be more pronounced in electronics exports and less so in non-electronics exports and manufacturing,' writes Koh. Any further growth drag in these sectors, he adds, is likely to stem from weaker demand due to the tariffs themselves. RHB's Gan and Raveenthar note that although June's NODX numbers offer a 'welcome reprieve' and underscore the resilience of Singapore's trade architecture—especially its regional diversification—it 'should not be viewed' as a structural re-rating of the external sector. The pair adds: 'The fundamental backdrop remains mixed, with a delicate balance between cyclical recovery and looming protectionist headwinds.' Meanwhile, on Singapore's GDP in the second quarter, Oxford Economics' Yue sees that readings from the quarter will be 'revised upwards' from advanced estimates released earlier this week. On NODX, Yue has a slightly more prolonged outlook with regards to the frontloading boost than her fellow economists, noting that the process is "straightforward". 'The extension of the tariff suspension deadline to Aug 1 could further support goods exports. That said, we anticipate any remaining resilience to diminish over the upcoming months, especially if higher tariffs are imposed in the 3Q2025,' writes Yue. She adds that Singapore could benefit from an established re-exporting sector and a lower reciprocal tariff, while a structural shift in AI-linked electronics demand should continue to be a tailwind. Yue surmises: 'Therefore, although export growth is expected to decelerate, a collapse in 2025 is unlikely.' Senior economist at DBS Bank, Chua Han Teng, agrees that NODX of 16.5% y-o-y in the 1H2025 is unsustainable, with the front-loading of shipments eventually being followed by a 'payback' through decelerating trade and manufacturing production to materialise in the second half. 'The city-state's external demand will likely face downward pressures, due to still-high global trade frictions and continued uncertainty surrounding US tariffs, such as the potential imposition of US sectoral tariffs on semiconductors and pharmaceutical goods,' writes Chua. See Also: Click here to stay updated with the Latest Business & Investment News in Singapore Economists raise 2025 GDP forecast following 2Q flash estimate but stay wary on 2H Singapore, London are costliest cities for luxury spending New grant for local firms to seek advice, subsidies as Trump's tariffs bite Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? 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Yahoo
40 minutes ago
- Yahoo
Shareholders in Metis Energy (SGX:L02) are in the red if they invested three years ago
Metis Energy Limited (SGX:L02) shareholders should be happy to see the share price up 23% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 44% in the last three years, falling well short of the market return. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Because Metis Energy made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size. Over the last three years, Metis Energy's revenue dropped 33% per year. That means its revenue trend is very weak compared to other loss making companies. On the face of it we'd posit the share price fall of 13% compound, over three years is well justified by the fundamental deterioration. It would probably be worth asking whether the company can fund itself to profitability. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors. The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail). You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic. A Different Perspective Investors in Metis Energy had a tough year, with a total loss of 23%, against a market gain of about 27%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.6% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Metis Energy is showing 4 warning signs in our investment analysis , and 2 of those are a bit unpleasant... But note: Metis Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singaporean exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
40 minutes ago
- Yahoo
Returns Are Gaining Momentum At Cepatwawasan Group Berhad (KLSE:CEPAT)
To find a multi-bagger stock, what are the underlying trends we should look for in a business? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So on that note, Cepatwawasan Group Berhad (KLSE:CEPAT) looks quite promising in regards to its trends of return on capital. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. What Is Return On Capital Employed (ROCE)? For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Cepatwawasan Group Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.087 = RM40m ÷ (RM500m - RM37m) (Based on the trailing twelve months to March 2025). Thus, Cepatwawasan Group Berhad has an ROCE of 8.7%. On its own that's a low return on capital but it's in line with the industry's average returns of 9.4%. View our latest analysis for Cepatwawasan Group Berhad While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you're interested in investigating Cepatwawasan Group Berhad's past further, check out this free graph covering Cepatwawasan Group Berhad's past earnings, revenue and cash flow. The Trend Of ROCE Cepatwawasan Group Berhad is showing promise given that its ROCE is trending up and to the right. The figures show that over the last five years, ROCE has grown 334% whilst employing roughly the same amount of capital. So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward. What We Can Learn From Cepatwawasan Group Berhad's ROCE As discussed above, Cepatwawasan Group Berhad appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up. And with a respectable 49% awarded to those who held the stock over the last five years, you could argue that these developments are starting to get the attention they deserve. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. Cepatwawasan Group Berhad does have some risks though, and we've spotted 2 warning signs for Cepatwawasan Group Berhad that you might be interested in. While Cepatwawasan Group Berhad may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
