Economic hardships subdue the mood for Eid al-Adha this year
In Indonesia's capital, Jakarta, Muslim worshippers were shoulder-to-shoulder in the streets and the Istiqlal Grand Mosque was filled for morning prayers Friday.
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Yahoo
4 hours ago
- Yahoo
The Straits Times Index Has Cracked the 4,200 Level: Is There Room for Further Gains?
The Straits Times Index (SGX: ^STI) posted a sterling performance year-to-date (YTD) as it broke multiple record highs. Earlier this month, the bellwether blue-chip index crossed the 4,000-mark for the first time as it recovered from April's tariff announcement. Just this week, the index has shot past the 4,200 level and shows no sign of stopping. Can this rally sustain, or should investors stay cautious for now? We unpack these developments to bring you some insights. A broad-based rally The surge in the STI is impressive, but investors may be surprised to note that the three local banks are not responsible for the bulk of this rise. DBS Group (SGX: D05), which occupies the largest weight within the STI at 25.1%, saw its share price increase by a little under 10% YTD. *Note: All weights are as of 31 March 2025. The next largest index component, OCBC Ltd (SGX: O39), takes up 16.3% of the index while Singapore's third largest bank, United Overseas Bank (SGX: U11) or UOB, had a weight of 12.4%. OCBC's share price increased just 3.4% YTD while UOB's shares inched up 1.9% YTD. Hence, it's clear that the banks have not contributed much to the index's stellar performance. So, the question is – which stocks did the heavy lifting this time? One example is Singapore Technologies Engineering (SGX: S63). The engineering firm's shares soared 77.9% YTD to hit S$8.27. Several other blue-chip stocks also posted strong share price gains. Property developers did well, with UOL Group (SGX: U14) surging 34.9% YTD and Hongkong Land (SGX: H78) soaring 42.9%. Sembcorp Industries (SGX: U96) leapt 41.8% YTD while Singapore Exchange (SGX: S68) saw its shares increase by 26.2% YTD. Local telco Singtel (SGX: Z74) also posted a strong performance with its share price jumping 33.7% YTD. Awaiting the banks' results These performances were achieved even when there were no major corporate announcements or earnings results. This suggests that the optimism could be related to the recent announcement of a large, S$1.1 billion capital injection by the Monetary Authority of Singapore to revitalise Singapore's stock market. There could be room for the rally to continue if the banks do report robust results. OCBC will report on 1 August while both DBS and UOB will announce their first half and second quarter earnings on 7 August. With interest rates set to hover 'higher for longer', the lenders could enjoy an unexpected tailwind if they can maintain their net interest margins. Fee income should also stay strong with wealth inflows into the region along with buoyant credit card spending. As for the rest of the STI's components, investors will also be keeping a close eye on their business updates and earnings announcements as the earnings season gets underway. Strategic reviews to unlock further value A catalyst that could take share prices higher is strategic reviews and long-term plans announced by several blue-chip players. Some companies also communicated their long-term objectives via Investor Day sessions that give investors a clearer idea of what to expect. For instance, ST Engineering released its Investor Day 2025 slides earlier this year and came up with another set of ambitious targets for 2029. The engineering giant also announced a progressive dividend policy that will add an incremental dividend based on one-third of the year-on-year increase in net profit from 2027 onwards. Hongkong Land also announced its strategic review late last year and has followed through with it by posting a higher year-on-year dividend for its 2024 results. Sembcorp Industries went a step further. The utility and urban development group not only announced its 2028 targets during its Investor Day 2023, but also announced a corporate reorganisation earlier this year. These developments injected a much-needed dose of optimism as investors witness clear progress towards attaining these goals. Singtel also reported a higher year-on-year dividend for fiscal 2025 and announced a S$2 billion share buyback programme to unlock more value for shareholders. Investors will be closely scrutinising the upcoming earnings season to determine if these companies can continue to report higher profits, free cash flow, and dividends. Get Smart: Monitor the business closely If you are afraid of a pullback in the STI, you are not alone. Some investors have expressed doubts about whether this surge is sustainable. One piece of good advice is to monitor the business behind the stock. If the business does well, the share price should naturally follow. Singapore's stock market is on a historic run, but can it last? We'll explore where interest rates are heading, whether blue-chip earnings can keep growing and more. Get the clarity you need — sign up now for our free webinar. When the market is unpredictable, where can you park your money with confidence? Our latest FREE report reveals 5 Singapore dividend-payers built to withstand global storms. Get it now and see what's still worth holding. Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses! Disclosure: Royston Yang owns shares of DBS Group and Singapore Exchange. The post The Straits Times Index Has Cracked the 4,200 Level: Is There Room for Further Gains? appeared first on The Smart Investor. Sign in to access your portfolio
Bloomberg
5 hours ago
- Bloomberg
Tariffs, Duterte Risks Loom as Philippines' Marcos Charts Last Years in Power
Fresh from tariff talks with President Donald Trump, Philippine leader Ferdinand Marcos Jr. is on Monday set to unveil plans to boost growth as he starts the second half of his single six-year term beset with economic and political risks. Marcos will use his annual speech to Congress to push welfare and infrastructure programs as he steers the Southeast Asian economy through global trade tensions. He's also likely to call for national unity after his rival, Vice President Sara Duterte, on Friday successfully thwarted efforts to disqualify her from office and the 2028 elections.
Yahoo
2 days ago
- Yahoo
Trump Tariffs Leave Costly China Supply Question Unanswered
(Bloomberg) -- President Donald Trump's recent flurry of trade deals have given Asian exporters some clarity on tariffs, but missing are key details on how to avoid punitive rates that target China's supply chains. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Trump Administration Sues NYC Over Sanctuary City Policy Trump unveiled tariffs of 20% for Vietnam and 19% for Indonesia and the Philippines, signaling those are the levels the US will likely settle on for most of Southeast Asia, a region that ships $352 billion worth of goods annually to the US. He's also threatened to rocket rates up to 40% for products deemed to be transshipped, or re-routed, through those countries — a move largely directed at curbing Chinese goods circumventing higher US tariffs. But still unclear to manufacturers is how the US will calculate and apply local-content requirements, key to how it will determine what constitutes transshipped goods. Southeast Asian nations are highly reliant on Chinese components and raw materials, and US firms that source from the region would bear the extra tariff damage. That's left companies, investors and economists facing several unanswered questions about Trump's tariffs that appear aimed at squeezing out Chinese content, according to Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore. 'Is that raw materials? All raw materials? Above a certain percentage?' she said. 'How about parts? What about labor or services? What about investment?' In an agreement with Indonesia last week, the White House said the two countries would negotiate 'rules of origin' to ensure a third country wouldn't benefit. The deal with Vietnam earlier this month outlined a higher 40% tariff rate for transshipped goods. And Thai officials, who have yet to secure a deal, detailed that they likely need to boost local content in exports to the US. Missing Details The Trump administration isn't providing much clarity on the matter right now. US officials are still working out details with trading partners and looking at value-based local content requirements, to ensure exports are more than just assembled imported parts, according to a person familiar with the matter, who didn't want to be identified discussing private talks. A senior Trump administration official also said this week that details on the approach to transshipment are expected to be released before Aug. 1, the deadline for when higher US tariffs kick in. Some factories are already adjusting their supply chains to comply with rules that will require more locally-made components in production. Frank Deng, an executive at a Shanghai-based furniture exporter with operations in Vietnam — and which gets about 80% of business from the US — said in an interview his firm is making adjustments as authorities appear to be more strictly enforcing country-of-origin rules. Vietnam has always had specific local content requirements for manufacturers, Deng added, including that a maximum of 30% of the volume of raw materials originates from China, and the value after production in Vietnam must be 40% higher than the imported raw materials. 'We've been struggling to meet all the standards so that we can still stay in the game,' Deng said. 'But I guess that's the only way to survive now.' For most of Southeast Asia, reducing the amount of Chinese-made components in manufacturing will require a complete overhaul of their supply chains. Estimates from Eurasia Group show that Chinese components make up about 60% to 70% of exports from Southeast Asia — primarily industrial inputs that go into manufacturing assembly. About 15% of the region's exports now head to the US, up about four percentage points from 2018. Local Content The US has become increasingly vigilant about China's ability to bypass US trade tariffs and other restrictions through third countries since Trump's first trade war in 2017. Thailand signaled its frustration over the lack of clarity for how much local content is needed in goods exported to the US to avert transshipment rates, but noted it will likely be much higher than a traditional measure of 40%. 'From what we've heard, the required percentage could be significantly higher, perhaps 60%, 70%, or even 80%,' Deputy Prime Minister Pichai Chunhavajira said July 14. 'Emerging countries or new production bases are clearly at a disadvantage,' he said, as their manufacturing capabilities are still at an early stage and must rely on other countries for raw goods. Vietnam, Thailand and Malaysia have all taken steps this year to address Trump's concerns, increasing scrutiny of trade that passes through their ports including new rule-of-origin policies that centralize processing and imposing harsh penalties on transshippers. Developing nations may still struggle to enforce Trump's rules or comply with the rules if it means going up against China, their largest trading partner and geopolitical partner. 'The reality is it's not enforceable at all,' said Dan Wang, China director at Eurasia Group. 'Chinese companies have all kinds of ways to get around it and those other countries have no incentive to enforce those measures, or capacity to collect the data and determine local content.' --With assistance from Patpicha Tanakasempipat, Skylar Woodhouse and Nguyen Dieu Tu Uyen. Burning Man Is Burning Through Cash Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk A Rebel Army Is Building a Rare-Earth Empire on China's Border ©2025 Bloomberg L.P.
