Market Focus Daily: Wednesday, June 18, 2025
Hostilities in the Middle East send oil prices higher; Oil extends its climb as well; Broad risk-off moves across markets abate and US retail sales fall.
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 by: Howie Lim (howielim@sph.com.sg)
Produced and edited by: Chai Pei Chieh & Claressa Monteiro
Produced by: BT Podcasts, The Business Times, SPH Media
---
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
Follow BT Market Focus and rate us on:
Channel: bt.sg/btmktfocus
Amazon: bt.sg/mfam
Apple Podcasts: bt.sg/mfap
Spotify: bt.sg/mfsp
YouTube Music: bt.sg/mfyt
Website: bt.sg/mktfocus
Feedback to: btpodcasts@sph.com.sg
Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party's products and services. Please consult professional advisors for independent advice.
Discover more BT podcast series:
BT Money Hacks at: bt.sg/btmoneyhacks
BT Correspondents: bt.sg/btcobt
BT Podcasts: bt.sg/pcOM
BT Branded Podcasts: bt.sg/btbrpod
BT Lens On: bt.sg/btlenson
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
4 hours ago
- Business Times
Market Focus Daily: Wednesday, June 18, 2025
Hostilities in the Middle East send oil prices higher; Oil extends its climb as well; Broad risk-off moves across markets abate and US retail sales fall. 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 by: Howie Lim (howielim@ Produced and edited by: Chai Pei Chieh & Claressa Monteiro Produced by: BT Podcasts, The Business Times, SPH Media --- 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 Follow BT Market Focus and rate us on: Channel: Amazon: Apple Podcasts: Spotify: YouTube Music: Website: Feedback to: btpodcasts@ Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party's products and services. Please consult professional advisors for independent advice. Discover more BT podcast series: BT Money Hacks at: BT Correspondents: BT Podcasts: BT Branded Podcasts: BT Lens On:
Business Times
8 hours ago
- Business Times
BlackRock launches absolute return hedge fund for retail investors in Singapore and Hong Kong
[SINGAPORE] BlackRock has launched an Asia-Pacific-focused hedge fund for retail investors in Singapore and Hong Kong, the world's largest asset manager with US$11.6 trillion in assets under management announced on Wednesday (Jun 18). The fund, titled the Systematic Asia Pacific Equity Absolute Return Fund, employs a market-neutral strategy that is designed to be resilient to volatility in the broad equity markets by taking long and short positions in select stocks. Put simply, 'the strategy aims to give you non-market-driven returns', said Dennis Quah, head of Singapore wealth at BlackRock, in an interview with The Business Times. 'We pick stocks that we expect to do well, taking a long position on those, and take a short position (on) stocks that we expect not to do well. And we do it with a systematic investing approach,' he explained. A short position is the monetising of a stock-price or asset-value depreciation, he added. 'If you expect something to go up in value, you take a long position. If you expect something to go down in value, you take a short position.' The fund, which was open to institutional investors in Singapore in 2017, had US$727 million in net assets as at May 31, 2025, and more than 2,800 holdings. In 2024, it delivered a 23.7 per cent return, according to the fund fact sheet. 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 'In Singapore, the fund is available in UOB personal financial services, Citibank Singapore and other platforms,' a spokesperson said. Vital for investors to understand the approach Part of the challenge in launching a hedge fund for retail investors is ensuring that they understand the investment strategy, and managing the negative impressions people have of hedge funds. 'To those who are not familiar with hedge funds, some words that typically get associated with them, are risky, heavily leveraged, dangerous, opaque, black box… Hedge funds as a category of investment product generally have had a negative connotation to it emanating from past crisis events such as the Asian financial crisis (and) the global financial crisis,' Quah admitted. 'But if you actually break down the word hedge fund – hedging means, actually, to reduce risk, not necessarily to increase it. So a hedge fund is actually, by construct, supposed to hedge away the risk that you don't want, to isolate the risk that you want,' he said. Given the right framework and in the right hands, hedge funds can add value to a portfolio, he added. However, he warns that the fund should not be consumed on its own, but be commingled with a larger portfolio. In BlackRock chairperson Larry Fink's 2025 annual letter to investors, he said that the future standard portfolio will no longer be 60/40, where 60 per cent of assets are allocated to equities and 40 per cent to bonds. Instead, he noted, the proportion would be 50/30/20 – with 50 per cent and 30 per cent allocated to stocks and bonds, respectively, and 20 per cent to alternatives. Still, the fund is not without its risks, conceded Quah. It might not deliver returns if the portfolio managers get the investment strategy wrong by consistently going long on the companies that lose value and going short on the companies that rise in value. Also, if the dispersion between good and bad-performing companies narrows dramatically where everything goes up or down at the same time, there will be little or no opportunity to make money or deliver absolute positive returns. 'So that's an extreme situation that we don't expect to happen for protracted periods of time. It may happen sporadically, like what we saw with the Magnificent Seven a few months ago, but, even then, you saw that massive mean reversal later on,' he said. The Magnificent Seven refers to the top seven mega-cap companies in the S&P 500, and includes Alphabet, Amazon, Apple and Meta. The fund has also put in place risk-mitigation measures, he added. 'We have a very diversified approach. We have 2800 securities in this portfolio, so it runs systematically. No one human being can manage that number of stocks in one portfolio on a purely fundamental basis. So we combine human expertise with technology to help us implement the investment strategy.' BlackRock's systematic platform brings research and measurement techniques to the investment process with the use of data and technology. This involves using machine-learning systems to weight investment signals that indicate how companies might perform – from tweets by chief executive officers, to public sentiment about a company that might indicate fundamental data such as sales and revenue numbers, for instance.
Business Times
11 hours ago
- Business Times
China consumer rush for subsidies overloads stimulus programme
[BEIJING] China is testing the limits of what its consumer stimulus can accomplish by subsidising purchases of select goods, fuelling a shopping spree that boosted retail sales growth to the strongest in more than a year but threatening to overwhelm authorities even in the richest regions. Consumer participation in the home goods trade-in programme has seen provinces quickly running out of funds the national government has so far distributed to pay for the subsidies. Henan and Chongqing have been forced to suspend the granting of subsidies or receiving applications for the handouts, according to recent local government announcements and Chinese media reports, while Jiangsu and Guangdong imposed restrictions on the programme such as managing its daily quota. The disruptions are putting Beijing at a crossroads as it looks for a longer-term fix to a crisis of confidence among households. Officials have made expanding consumption their top economic priority this year in anticipation of US tariffs, doubling the amount of ultra-long special sovereign bonds to finance subsidies for the cash-for-clunkers drive from last year to 300 billion yuan (S$54 billion). Just over half of the total has been distributed or is in the process of being disbursed to local governments. 'The rapid use of the subsidies suggests the programme is effective in expanding sales of the products it targets,' said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered. 'However, considering limitations to the country's fiscal capabilities, we still need sustainable measures to carry on the traction in the long run after sentiment is boosted by the subsidies in the short term,' Ding said. 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 programme has been key to encouraging household purchases of a slew of consumer goods this year. In May alone, home appliances and electronics saw growth in excess of 50 per cent. The trade-in programme 'should remain supportive for some durable goods sales', according to economists at Goldman Sachs, who also warned in a note that 'its boost may be disrupted in June due to funding shortages in some regions'. The authorities have said they will distribute a total of 162 billion yuan in two tranches to provinces, with the second allocation announced in late April. Some seven weeks later, the central bank-backed Financial News reported that money is still in the process of being made available to provinces. While the government may soon roll out the remaining funds planned for this year, economists cautioned that Beijing needs to come up with more sustainable measures to put consumption on track to recovery for the long haul. Another approach Beijing is taking is relying more on policies aimed at lifting business confidence to encourage private investment and hiring, a shift likely to translate into stronger consumption if sustained over time. Such steps include meeting government arrears to companies and the recent appeal to major electric vehicle makers to make timely bill payments. Unlike the consumer subsidies, such measures offer no quick payoff but could help consumption in the longer term, according to Ding. For now, he expects speedy follow-up subsidy allocations by the national government to 'maintain confidence' since Beijing is front-loading fiscal incentives this year. Concern over-reliance on subsidies is also spreading to official circles. A newspaper backed by the State Council, China's cabinet, has said the government 'must improve the income distribution system and try all means to increase income' for residents. 'Boosting consumption cannot just rely on policy stimulus,' according to a front-page editorial carried earlier this month in The Economic Daily. Mounting fiscal stress is another reason why Beijing's options are narrowing. With tax and land sales revenues in decline, Chinese authorities accelerated borrowing in recent years to fund stimulus measures to support the economy. Beijing raised its official fiscal deficit – mostly shouldered by the central government – to the highest level in more than three decades this year, and increased the amount of special sovereign bond issuance to 1.8 trillion yuan, 80 per cent more than in 2024. As a result, China's interest bill is increasing quickly, in turn eroding the government's spending power. But as Donald Trump's tariffs hurt overseas demand and put China's industrial production under pressure, it's unlikely that Beijing will change course on its flagship policy of consumer subsidies any time soon, despite recent hiccoughs. Some regions may have had to announce a partial suspension of the programme after running out of trade-in funds because of promotions offered during the '618' shopping festival, Morgan Stanley economists including Robin Xing wrote in a note. Local authorities may also be attempting to smooth the pace of subsidy rollout and prevent 'arbitrage,' they added, in response to efforts by some retailers to benefit from the consumer subsidies by inflating prices. 'These glitches in the consumer goods trade-in programme may be fine-tuned or remedied, but they may also reflect inherent limitations of such stimulus,' the Morgan Stanley economists said. 'Given continued external uncertainty and deflationary pressures, we see a very low risk of the consumer trade-in programme being suspended altogether.' BLOOMBERG
