Singapore shares dip ahead of Fed decision; STI down 0.3%
[SINGAPORE] Stocks on the local bourse fell on Wednesday (Jun 18), tracking the mixed performance in other Asian markets, as investors awaited the US Federal Reserve's policy decision and release of its updated dot plot.
The benchmark Straits Times Index (STI) lost 0.3 per cent or 9.83 points to close at 3,920.81.
Across the broader market, decliners outnumbered advancers 243 to 212, with 822.1 million securities worth S$905.7 million changing hands.
The biggest gainer on the STI was telco giant Singtel , which rose 1 per cent or S$0.04 to S$3.97. The uptick followed news that its subsidiary Optus Mobile had reached a settlement with the Australian Competition and Consumer Commission, over court proceedings related to alleged sales misconduct.
At the bottom of the index was agribusiness Wilmar International . The counter slid 2.7 per cent or S$0.08 to S$2.93, after Indonesian authorities seized 11.8 trillion rupiah (S$928 million) from its parent company, Wilmar Group, in a palm-oil graft case.
Meanwhile, the trio of local banks ended in the red. DBS fell 0.5 per cent or S$0.23 to S$44.23; UOB was down 0.3 per cent or S$0.12 at S$34.83; and OCBC lost 0.3 per cent or S$0.05 to close at S$16.04.
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Elsewhere in the region, key indices ended mixed as investor sentiment remained cautious ahead of the Fed's policy decision. Japan's Nikkei 225 rose 0.9 per cent and South Korea's Kospi was up 0.7 per cent. The Bursa Malaysia KLCI ended flat, Australia's ASX 200 shed 0.1 per cent, and Hong Kong's Hang Seng slid 1.1 per cent.
The Fed is widely expected to keep interest rates unchanged at its meeting on Wednesday, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
She noted that the base case remains for two rate cuts this year, with the first unlikely to happen before September, based on Fed funds futures pricing. Ahead of the decision, the probability of a September cut stood at around 63 per cent.
'While the economic projections and dot plot could shift market expectations, rising geopolitical and trade uncertainties mean the Fed's growth and inflation forecasts may lack precision,' she added.
She cautioned that any signals from the dot plot should be taken 'with a grain of salt', as the Fed is likely to emphasise that policy remains appropriately positioned and that future moves will depend on incoming data.
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Business Times
an hour ago
- Business Times
Wilmar's record payout of S$928m marks Indonesia's deepening crackdown on palm oil graft
[JAKARTA] The Indonesian authorities' seizure of 11.8 trillion rupiah (S$928 million) from agri-giant Wilmar Group is not only the country's largest asset confiscation, but also unprecedented for the company voluntarily handing the amount over in cash – a move legal experts say enables prosecutors to sidestep the complexities of liquidating seized property. The move throws a spotlight on Jakarta's stepped-up efforts to root out graft in the palm oil sector, following allegations of misconduct during a severe shortage of cooking oil in late 2021 to early 2022, which exposed governance lapses in one of Indonesia's most vital industries. Harli Siregar, the spokesperson for the Attorney-General's Office (AGO), told The Business Times: 'This was the largest seizure of funds in the history of ongoing cases.' The sum, representing nearly two-thirds of Wilmar's net income last year, was handed over at the authorities' request as a gesture of the company's 'good faith and innocence' in the ongoing case. Abdul Fickar Hadjar, a criminal law specialist at Trisakti University, said the confiscated funds could strengthen the prosecution's appeal against the ruling by a lower court in March, which had acquitted Wilmar and two other palm oil companies. He said: 'This makes it easier for prosecutors to present additional evidence in the Supreme Court appeal. Seized assets are typically in the form of valuables like property or goods, which are more difficult to use as evidence because they usually need to be auctioned off first.' A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The Wilmar case, still unfolding amid Indonesia's broader push to reform its palm oil industry, is now before the country's Supreme Court, which will review the lower court's judgment on points of law. Palm oil purge In 2023, Indonesia, the world's largest producer and exporter of palm oil, set up a task force to enhance governance in the industry and to boost state revenue. The AGO said it has handed over to the state some 217,000 hectares of palm oil plantation land – assets seized from corruption cases over the last seven years. The last major seizure was made in a high-profile case involving tycoon Surya Darmadi, the owner of the Duta Palma Group, who was convicted of corruption over illegal changes in land use in Riau province between 2003 and 2022. He was sentenced to 15 years in prison. Last September, his appeal was thrown out by the Supreme Court, which upheld the jail sentence. Three months later, the AGO confiscated around five trillion rupiah in cash from the tycoon. Largest haul At a briefing held at the AGO's premises on Tuesday (Jun 17), members of the press were shown towering stacks of 100,000 rupiah banknotes confiscated in the Wilmar case. Observers deemed the striking display as a vivid testament to the scale of the corruption scandal. At a press briefing on Tuesday, Indonesia's Attorney-General's Office put on show trillions of rupiah in seized assets from the corruption case involving Wilmar Group and export permits for crude palm oil products. PHOTO: ATTORNEY-GENERAL'S OFFICE, JAKARTA Siregar said that the funds identified as state losses could be used to support the revitalisation of Indonesia's palm oil industry. In its statement, however, Wilmar said the funds were a security deposit ahead of the Supreme Court ruling on the 2022 palm oil export case, in which five Wilmar subsidiaries were accused of misconduct during the cooking oil crunch in the country. The company stated that the deposit will be refunded if the Supreme Court upholds the lower court's decision, but may be partially or fully forfeited if the ruling is overturned. Although the lower court had ruled in favour of Wilmar and two other palm oil traders in March, that verdict is now under fire, given the AGO's appeal against it, and the controversy that arose from judges having been accused of accepting bribes to rule in favour of the accused. Hadjar from Trisakti University said that while repaying state losses does not negate potential criminal liability, Wilmar's willingness to provide the security deposit could be viewed as a mitigating factor, depending on how the Supreme Court assesses the case. He also added that the company's move to surrender the funds may help the company manage the potential economic fallout. Sustainability in question The ongoing corruption case involving Wilmar Group's Indonesian units could pose a significant challenge to the company's reputation as a global sustainability leader in the palm oil industry. Observers say the case underscores the complex challenges multinational companies face in maintaining consistent governance and ethical standards across different jurisdictions – a crucial concern for investors and stakeholders who are increasingly prioritising sustainability and corporate responsibility. Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the NUS Business School, said Wilmar has long positioned itself at the forefront of sustainable palm oil production. He warned that the case could hurt its reputation, especially among clients in markets such as Europe which are sensitive to environmental, social and governance (ESG) factors, as well as in the increasingly ESG-conscious Asian markets of China and India. 'The case primarily affects the governance aspect, as it involves (allegations of) lapses in business integrity and ethics,' he said. 'While cooperating with the authorities and returning funds may mitigate the ESG impact, they do not eliminate the underlying concerns about governance weaknesses. Rebuilding the company's reputation will be its most critical priority,' he added. In a statement on Tuesday, Wilmar Group said its five subsidiaries maintain that all their actions were carried out in good faith and without corrupt intent. On Wednesday, the shares of the group's Singapore-listed entity, Wilmar International, fell S$0.08 or 2.7 per cent to S$2.93, with 19 million shares traded.
Business Times
3 hours ago
- Business Times
Inside Wilmar's graft probe: How a cooking oil crisis led to a multitrillion rupiah corruption scandal
[SINGAPORE] Indonesian authorities in May seized 11.8 trillion rupiah (S$928 million) from global palm oil company Wilmar as part of an ongoing corruption case involving allegations of bribery to obtain palm oil export permits in 2022. The company, founded by Singaporean tycoon Kuok Khoon Hong, stands accused of earning unauthorised profits by evading state-imposed export controls that sought to curb a cooking oil crisis and domestic palm oil shortage that rocked Indonesia in 2021 and 2022. Wilmar was initially acquitted by a lower court in March, but the case is back in the limelight as the Indonesian Supreme Court reviews the earlier ruling. The Business Times traces the events that led up to Wilmar's corruption probe and its multitrillion rupiah asset seizure. Jan 18, 2022: Indonesian officials announce that palm oil exporters will be required to obtain permits for exports and to declare how much palm oil they plan to sell domestically. Jan 19, 2022: A cap limiting cooking oil prices to 14,000 rupiah per litre takes effect. The move is part of government efforts to curb the rise in domestic cooking oil prices, which had shot up as much as 40 per cent from a year earlier, in line with a global palm oil price surge. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Jan 24, 2022: The requirement that palm oil exporters obtain export permits kicks in. Apr 19, 2022: The Indonesian Attorney-General's Office (AGO) names four suspects in a corruption case linked to the issuance of palm oil export permits. One suspect is a government official from the Trade Ministry. The others are executives from three palm oil producers – North Sumatra-based Permata Hijau Group, Musim Mas Group, and Wilmar's subsidiary, Wilmar Nabati Indonesia. Apr 28, 2022: Indonesia bans the export of crude palm oil (CPO) and all its derivative products – including cooking oil – to shore up domestic supplies and ease costs, as soaring global CPO prices spur producers to export the commodity instead of selling it at home. May 23, 2022: The ban is lifted after considering improvements in local palm oil supply and prices, Indonesian authorities say. Mar 19, 2025: Four judges acquit Wilmar Group and the two other companies of charges of misconduct in obtaining export permits in 2022. Apr 12, 2025: The Indonesian AGO accuses the judges behind the acquittal of receiving bribes to clear the companies of all charges. Apr 13, 2025: Three of the judges behind the acquittal are arrested, following the earlier arrest of the fourth judge, who allegedly received 60 billion rupiah to arrange a favourable verdict for the companies. The three judges are said to have received US$1.07 million in bribes. Apr 14, 2025: Wilmar maintains its innocence, stating that its actions to increase the supply of palm oil were intended to help the government improve domestic supply and lower prices. Jun 17, 2025: The corruption case undergoes a review by the Supreme Court, which will determine if the earlier lower court ruling will stand, says the AGO, which appealed the acquittal. The AGO says the 11.8 trillion rupiah that Indonesian authorities seized from five Wilmar subsidiaries in late May is compensation for state losses arising from the graft case. Wilmar says the seized assets are a security deposit that will be returned if the Supreme Court upholds the lower court's ruling; should it rule otherwise, the sum may be forfeited in part or in whole.
Business Times
3 hours ago
- Business Times
Wilmar International down 4% after Jakarta's seizure of 11.8 trillion rupiah from Wilmar Group in graft case
[SINGAPORE] The shares of Wilmar International fell on Wednesday (Jun 18) morning after the Indonesian authorities seized 11.8 trillion rupiah (S$928 million) from its parent company Wilmar Group in a palm-oil graft case. As at 9.08 am, the counter was trading at S$2.89, down S$0.12 or around 4 per cent from Tuesday's closing price of S$3.01, with 4.9 million shares having changed hands. This was the lowest level its share price had hit in more than five years. As at the market close, the counter recovered somewhat to finish at S$2.93, still down by S$0.08 or 2.7 per cent, with some 19 million shares having been transacted. This comes as the Indonesian authorities probe Wilmar Group and two other palm-oil companies, which they accuse of paying bribes to obtain export permits between January and April 2022. Wilmar International is the Singapore-listed subsidiary of Wilmar Group. On Tuesday, a spokesperson from the Indonesian Attorney-General's Office said that the seizure was part of its drive to recover state losses stemming from acts of corruption.
