Market Focus Daily: Tuesday, April 22, 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
43 minutes ago
- Business Times
Singapore sets up economic strategy review under tariff task force to take ‘fresh look' at longer-term strategies: DPM Gan
[SINGAPORE] The Republic is carrying out an economic strategy review (ESR) to look at its longer-term strategies, given the significant challenges brought by a new regime of US tariffs as well as the fraying multilateral trading system. Announcing this on Monday (Aug 4), Deputy Prime Minister Gan Kim Yong said that the review will replace one of the work streams of the Singapore Economic Resilience Taskforce (Sert) that he chairs – one that looks at developing longer-term strategies to help businesses and the workforce 'seize opportunities in the new economic landscape'. 'Even as we work on the longer-term plans, we also realise it's going to be very complex given the fast-evolving global landscape,' he said at a media briefing. 'With the tariffs changing from month to month, sometimes from day to day, it's important for us to take a comprehensive review and not rush into a conclusion of what we should do in the longer term,' he added. Asked about the work of similar economic review committees in the past and whether those recommendations are still relevant, DPM Gan said the challenges in each period are very different. 'Given the new regime of tariff structure, we are going to face challenges (to) the rules-based multilateral trading system, which is quite fundamental, since this is a system we have relied on for decades to conduct our trade and to allow our economy to develop and grow.' 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 He added that while tariffs on a majority of countries have been announced, two key economies – India and China – are still in negotiation. 'There are a lot of unknowns going forward, but, at the same time, while these are challenges, there are also opportunities and possibilities. Therefore it's important for us to take a fresh look at our strategy.' Fresh perspectives The ESR comprises five committees, each co-chaired by two political officeholders and comprising members from the private sector, academia and unions. In all, seven of the 10 co-chairs are first-time political officeholders. They will look into five areas: strengthening Singapore's global competitiveness; leveraging technology and innovation; nurturing entrepreneurship; enhancing human capital; and managing the impact of restructuring. The committees plan to 'engage widely' over the next few months and report their findings to Sert, with a report outlining their recommendations slated for mid-2026. These recommendations will then be submitted to the government for consideration 'at the right time', said DPM Gan. Explaining the composition of the ESR, DPM Gan said that the younger political officeholders would be looking at the issues from a different angle and would provide fresh ideas and recommendations, while Sert is composed of experienced ministers. 'The idea is to have a balance of both the experienced ones as well as the younger ones,' he noted. Committee No 1, which looks at global competitiveness, will be chaired by Acting Transport Minister and Senior Minister of State for Finance Jeffrey Siow and Senior Minister of State for Trade and Industry and Culture, Community and Youth Low Yen Ling. Committee No 2, which focuses on technology and innovation, will be chaired by Minister of State for Digital Development and Information and Education Jasmin Lau and Senior Parliamentary Secretary for Culture, Community and Youth and Sustainability and the Environment Goh Hanyan. The third committee on entrepreneurship is chaired by Minister of State for Trade and Industry and National Development Alvin Tan and Minister of State for Culture, Community and Youth and Manpower Dinesh Vasu Dash. The fourth committee on human capital is chaired by Acting Minister for Culture, Community and Youth and Senior Minister of State for Education David Neo and Senior Minister of State for Manpower and Health Koh Poh Koon. Committee No 5, which looks into managing the impact of restructuring, is chaired by Minister of State for Home Affairs and Social and Family Development Goh Pei Ming and Minister of State for Defence and deputy secretary-general of the National Trades Union Congress Desmond Choo.
Business Times
4 hours ago
- Business Times
Tesla approves share award worth US$29 billion to CEO Elon Musk
[AUSTIN] Tesla has granted CEO Elon Musk shares worth about US$29 billion, in a new pay deal aimed at keeping the billionaire entrepreneur at the helm during a crucial pivot from its struggling core auto business to robotaxis and humanoid robots. The company described the grant of the 96 million new shares as a first step, 'good faith' payment to honor Musk's more than US$50 billion pay package from 2018 that was struck down by a Delaware court last year. A longer-term CEO compensation plan will be put to a vote at its annual investor meeting on Nov 6. The Delaware ruling had cited flaws in the board's approval process and unfairness to investors. Musk kicked off an appeal against the order in March, claiming a lower court judge made multiple legal errors in rescinding the record compensation. The world's most valuable automaker is at a turning point, with Musk, its largest shareholder with a 13 per cent stake, positioning it more as an AI and robotics company amid falling sales in its mainstay auto business and a slump in its share price. The share award is designed to gradually boost Musk's voting power, something he and shareholders have consistently insisted was key to keeping him focused on Tesla's mission, said a special committee Tesla formed earlier this year to consider Musk's compensation. It consists of chair Robyn Denholm and independent director Kathleen Wilson-Thompson. 'While we recognise Elon's business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging... we are confident this award will incentivise Elon to remain at Tesla,' the committee said in Monday's (Aug 4) filing. 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 new shares vest only if Musk remains in a key executive role through 2027. They also have a five-year holding period, except to cover tax payments or the purchase price of US$23.34 per share, which is equal to the exercise price of the 2018 award. If the Delaware courts fully reinstate the 2018 CEO Performance Award, the new interim grant will either be forfeited or offset and there will be no 'double dip,' according to the filing with the Securities and Exchange Commission. 'This is simply a repackaged version of what was done years ago and was ruled improper by a judge,' said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. 'It renders the Delaware court decision effectively meaningless,' said Elson, who had filed amicus briefs supporting the Delaware Court's decision to void Musk's 2018 award. Auto business struggles Gary Black, a longtime Tesla investor who sold his position recently, said on X the award should be viewed 'very favourably' for the company as it aligns Musk's incentives with the shareholders and removes uncertainty about him leaving. Tesla shares rose more than 2 per cent in premarket trading. They have gained almost 2,000 per cent in the past decade, far outperforming the around 200 per cent increase in the benchmark S&P 500 index. But the stock has come under pressure this year, losing about a quarter of its value as Tesla grapples with a sales decline wrought by its aging vehicle line-up, tough competition and Musk's political stances that have alienated some buyers. The challenges have been worsened by US government cuts in support for EVs. Musk said at a post-earnings call last month the waning subsidies could lead to a 'few rough quarters' before a wave of revenue from self-driving software and services begins late next year. Analysts expect Tesla to post another annual sales decline in 2025 after its first one last year. S&P Global Mobility data shared exclusively with Reuters showed on Monday that Tesla's brand loyalty had plunged since Musk endorsed US President Donald Trump last summer. The world's most powerful person and its richest had a falling out earlier this year. And Musk has raised fears about whether he will be able to devote enough time and attention to Tesla after he locked horns with Trump by forming a new political party. The company also faces a long regulatory road to its robotaxi bet. It started a small trial of its robotaxis in Austin, Texas, June with about a dozen Model Y SUVs. But it lacks permits to offer the service in California, where it last week launched a ride-hailing service in the San Francisco Bay Area without indicating whether it would be using self-driving vehicles that power its Austin operations. REUTERS
Business Times
4 hours ago
- Business Times
Brexit's parallels with Trump tariffs tell a tale
In figuring out why the US tariff shock has not sent the economy or financial world into a tailspin, Britain's exit from the European Union trade bloc provides something of a playbook – and without a particularly happy ending. Aside from vast differences in economic scale and global reach, the two episodes bear some comparison in how they upended years of deeply integrated free trade and possibly in how business, the economy at large and financial markets reacted. The 2016 Brexit referendum and US President Donald Trump's tariffs this year were each widely billed as economic shocks that would send the financial world into paroxysms. They did not, at least not at the outset. To be sure, both were followed by dramatic downward lurches in the two countries' respective currencies. But to some extent, sterling's steep drop after the referendum vote and the US dollar's plunge on Trump's tariff plan this year helped offset some of the wider impact – at least on stock markets that are loaded with global firms with outsized foreign revenue. More broadly, however, the difficulty in isolating their immediate net impact means no 'big bang' economic crisis unfolds to prove critics right – even if their enduring legacy turns out to be a slow burn of economic potential and lost output, often obscured by multiple other crosswinds. Slow burn In Britain's case, the seismic effects of the Covid-19 pandemic distorted any attempt to easily assess Brexit when it actually happened. Tortuous negotiations with the EU meant the UK's departure eventually occurred on the eve of the health crisis in 2020, and the new trade rules did not come into force until a year later. 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 But in the four years between the referendum surprise and the pandemic, the UK economy never entered a recession nor recorded a negative quarterly gross domestic product print – confounding pro-EU supporters at the time and bolstering the Brexit lobby. Emerging from the twin hits, however, the economy has almost flatlined since. FTSE 100 stocks, helped by the weaker pound, kept pace with the S&P 500 and world indexes for about a year after the referendum before chronic underperformance set in. Since 2018, the UK market has lagged MSCI's all-country index by some 35 per cent. What is more, it has taken more than eight years for the pound's effective exchange rate to recover its pre-referendum levels. Few mainstream economists now doubt that Brexit has taken a serious toll on the UK economy – even if blame for that gets sprayed in multiple directions – and oceans of ink have been spilled trying to disentangle the precise impacts. One academic study by a number of Bank of England economists earlier this year concluded that uncertainty following the referendum resulted in little change in goods exports and imports before the exit was finalised. But after the new rules hit, UK imports fell 3 per cent and overall exports fell 6.4 per cent, largely because of the 13 per cent hit in exports to the EU. While this slump seems relatively modest compared to the official forecasts of the longer-term hit, the pain has been borne disproportionately by small businesses. Additionally, these findings exclude the Brexit hit to services and London's finance sector, which registered a much bigger economic dent. And the cumulative damage to London and the service sector over the next 10 years continues to worry the city. 'Lighting a fire' The US tariff story is of a completely different order, of course, as it will reverberate across the world economy. But there are some parallels, not least in certain aspects of the market reactions and the initial resilience. Economists estimate that the tariffs could lop anywhere from 0.5 per cent to 1 per cent off US GDP over time. That is a US$150 billion to US$300 billion hit which, though painful, would not be an instant crisis for an economy that is growing at a roughly 2 per cent annualised rate, where imported goods represent just 11 per cent of GDP, and where tech and artificial intelligence trends are generating considerable tailwinds. But as former White House economic adviser Jason Furman pointed out in a New York Times essay last week, the tariff damage is likely not a one-off hit. The loss of 0.5 per cent of GDP, he argued, is 'the equivalent of every household in America taking around US$1,000 and lighting it on fire – then doing it again every year. Forever.' In the end, the main point of the British comparison is to show how extreme partisan arguments on the pros or cons of such giant economic policy changes do not necessarily get resolved cleanly in adaptive, hardy and hyper-complex modern economies. The upshot is there is rarely a big crash to prove a point. And that in itself is unnerving if politically-motivated policies then appear workable on the surface and resist instant pushback – only to act as a drain on the economy over a protracted period. Many observers reasonably argue that sovereign democratic politics should always trump economic conventions and even directions. But do people eventually notice when it goes wrong? The latest YouGov opinion poll shows 56 per cent of Britons now think it was wrong to leave the EU – some nine years after their narrow vote to leave. The jury on Trump's tariffs is still out. REUTERS
