Market Focus Daily: Wednesday, July 2, 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
6 hours ago
- Business Times
Trump imposes additional 25% tariff on Indian goods, relations hit new low
[WASHINGTON] US President Donald Trump on Wednesday (Aug 6) issued an executive order imposing an additional 25 per cent tariff on Indian goods citing New Delhi's continued imports of Russian oil, sharply escalating tensions between the two countries after trade talks collapsed. The new measure raises tariffs on some Indian goods to as high as 50 per cent – among the steepest faced by any US trading partner. The move is expected to hit key Indian export sectors including textiles, footwear, and gems and jewellery and marks the most serious downturn in US-India relations since Trump returned to office in January. It also comes as Indian Prime Minister Narendra Modi prepares for his first visit to China in over seven years, suggesting a potential realignment in alliances as ties with Washington fray. 'India will take all actions necessary to protect its national interests,' India's external affairs ministry said in a statement, saying it was 'extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.' It said India's imports were based on market factors and aimed at energy security for its population of 1.4 billion. 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 Trade analysts warned the tariffs could severely disrupt Indian exports. The additional 25 per cent tariff comes into effect 21 days after Aug 7, the order said. 'With such obnoxious tariff rates, trade between the two nations would be practically dead,' said Madhavi Arora, economist at Emkay Global. Indian officials have privately acknowledged growing pressure to return to the negotiating table. A potential compromise could involve a phased reduction in Russian oil imports and diversification of energy sources. A senior Indian official said New Delhi was blindsided by the sudden imposition of the new levy and the steep rate, as both countries continue to discuss trade issues. Trump's decision follows five rounds of inconclusive trade negotiations, which stalled over US demands for greater access to Indian agriculture and dairy markets. India's refusal to curb Russian oil purchases – which surged to a record US$52 billion last year – ultimately triggered the tariff escalation. 'Exports to the US become unviable at this rate. Clearly, risks to growth and exports are rising, and the rupee may face renewed pressure,' said Garima Kapoor, economist at Elara Securities. 'Calls for fiscal support are likely to intensify.' Trump's executive order does not mention China, which also buys Russian oil. A White House official had no immediate comment on whether an additional order covering those purchases would be forthcoming. US Treasury Secretary Scott Bessent last week said he warned Chinese officials that continued purchases of sanctioned Russian oil would lead to big tariffs due to legislation in Congress, but was told that Beijing would protect its energy sovereignty. The US and China have been engaged in discussions about trade and tariffs, with an eye to extending a 90-day tariff truce that is due to expire on Aug 12, when their bilateral tariffs shoot back up to triple-digit figures. REUTERS
Business Times
7 hours ago
- Business Times
COEs: Large car category reaches new 2025 high of S$124k as some dealers 'caught off guard'
[SINGAPORE] The Certificate of Entitlement (COE) premium for larger, more powerful passenger cars (Category B) has reached a new high for the year, as the premiums for all categories, except for motorcycles, went up. According to observers, some dealers needed to bid aggressively to secure certificates after holding back in preceding rounds on the assumption that the COE supply would continue its growth trend. In the first round of COE bidding for August, the premium for Category B rose 3.7 per cent or S$4,397 to S$123,498, exceeding the previous 2025 record of S$121,501 set in January's first round of bidding. The Category B COE applies to larger, more powerful cars with engines of more than 1,600 cubic centimetres (cc) in capacity or with more than 97 kilowatts (kW) of power, or for electric vehicles (EVs) with more than 110 kW. The COE premium for mass-market cars, Category A, was stable: It rose 0.9 per cent, or S$907, to S$102,009. The Category A COE applies to cars that have engines of up to 1,600 cc in capacity or with up to 97 kW of power, or for electric vehicles (EVs) with up to 110 kW of power. 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 Category C premium, for commercial vehicles and buses, grew 2 per cent, or S$1,401, to S$70,001. Category E, the open category which can be used to register any type of motor vehicle except motorcycles, saw its premium go up 1.9 per cent, or S$2,334, to S$122,334, edging close to the 2025 record of S$123,000 set in January's first round of bidding. The motorcycle category, D, was the only one to post a dip. It was down 3.4 per cent, or S$322, at S$9,189. Caught off guard Industry observers told The Business Times that the recent increase in COE quotas was less than expected, and this may have caused some dealers to bid more aggressively. Ng Choon Wee, the commercial director of Hyundai distributor Komoco Motors, said: 'The (COE quota) increase was too small, nowhere near enough to meet demand, so some dealers may have been caught unawares.' The latest COE quota supply update for the period August to October saw overall supply increasing 2.6 per cent compared to the preceding three-month period to 18,701. Supplies of Category A and B were both up 1 per cent at 7,586 and 4,737, respectively. However, the May-July period's supply increase was greater – overall COE supply increased 6.4 per cent, with Category A up 10 per cent at 7,511 and Category B up 5 per cent at 4,689. The increase for February-April was also more significant: 8.2 per cent overall, 10.3 per cent for Category A and 10 per cent for Category B. The COE quota is revised every three months, with the quota announcement typically made in the last month of each period. As reported by BT, car dealers may have bid conservatively in the second round for July which ended on Jul 23 on the expectation of an increased quota, which was announced on Jul 28. Passenger car premiums for that round were largely flat. 'Since they probably held back on bidding, they needed to bid aggressively to secure more certificates this time around so they can fulfil their orders,' said Ng. Nicholas Wong, CEO of authorised Honda dealer Kah Motor, said : 'They were waiting for more quota, but they read the market wrongly, and there were still a lot of backorders from July.' Ng said that the dealers may have assumed that the quota would increase in similar proportions every three-month period, given the government's stance on the matter. In March, then senior minister of state for transport Amy Khor said the authorities will continue to increase the COE quota for cars and commercial vehicles every quarter until the supply peaks from 2026, echoing earlier statements in 2024 from the Ministry of Transport. 'A 1 per cent increase is less than expected, but it is still an increase. But it is clear that demand is still very strong and that's why COE premiums will remain high,' said Ng. Both Ng and Wong added that car demand had been strong in recent weeks. Ng pointed out that many brands have rolled out SG60 promotions and showroom traffic and sales had both increased in the past two weeks. 'The top five car brands are still in stiff competition, and I think private hire car fleets are still taking COEs opportunistically when they can,' said Wong. But for the coming weeks, it is not likely that COE premiums will be going south. 'I think part of what contributed to Category B's increase is dealers looking at the quota and thinking: 'Premiums are not going to come back down, and in fact, might go even higher. So I'd better get what I can now.'
Business Times
7 hours ago
- Business Times
Cathay Pacific warns of declining fares and cargo uncertainty, shares fall
[HONG KONG] Cathay Pacific Airways warned on Wednesday (Aug 6) of declining airfares, challenges at its budget carrier and uncertain cargo market conditions, sending its shares down almost 10 per cent to a one-month low. Hong Kong's flagship airline also said it had ordered 14 more Boeing 777-9 wide-body jets as it expands long-haul routes, taking its total orders for the model to 35 with options for another seven. Cathay's first-half profit rose 1 per cent to HK$3.65 billion (S$597.7 million) on a strong jump in passenger numbers, lower fuel prices and a steady cargo performance. But passenger yields, a proxy for airfares, fell 12.3 per cent at its main brand and 21.6 per cent at low-cost carrier HK Express, as Cathay and its rivals added capacity. 'HK Express continues to face short-term challenges,' chairman Patrick Healy said after the budget airline posted a first-half loss of HK$524 million, before net finance charges and taxation. Healy said Cathay was taking a long-term view and expected HK Express to become profitable. 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 Cathay shares ended 9.7 per cent lower at their lowest close since Jul 4, having seen their biggest one-day percentage drop since January 2021. The benchmark Hang Seng Index gained 0.3 per cent. 'The results were in line with expectations but the performance from the budget airline segment was not impressive,' said Steven Leung, a sales director in Hong Kong at brokerage UOB Kay Hian. Yields at Asia's airlines are coming down from post-pandemic record highs as carriers add capacity, intensifying competition. Asian peer Singapore Airlines said last week its yields declined 3.5 per cent in the April to June quarter, while those at its low-cost carrier Scoot fell 4.7 per cent. Cathay's chief commercial officer Lavinia Lau said a rise in long-haul flights and transit passengers was also pushing yields lower. North America yields took the biggest hit, falling by 17.5 per cent, and pressure on those routes could continue as Cathay added 50 per cent more US-bound capacity this summer and US visa issues for Chinese nationals may impact traveller numbers, Lau said. Bookings for Japan have not yet recovered to normal levels since a substantial drop-off in June amid rumours an earthquake would strike the country, CEO Ronald Lam said. Based at the world's busiest cargo airport, Cathay is one of Asia's largest cargo carriers and has benefitted from rising volumes of e-commerce out of China. Cathay said its cargo business showed resilience despite uncertainty caused by changes to US tariffs this year, in particular the cancellation of a duty-free exemption for low-value packages from China. The cargo division's half-year revenue rose 2.2 per cent, while yields fell 3.4 per cent. Cathay's order for 14 more 777-9 planes with GE engines exercised options secured in a 2013 order for 21 of the jets. It expects delivery by 2034. The long-delayed 777-9, Boeing's latest version of its 777, has not yet been certified. The model is undergoing flight testing and Boeing hopes to start deliveries next year. Cathay said it expects its first 777-9 delivery in 2027. REUTERS
