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Business Times
8 hours ago
- Business
- Business Times
How the US market fell from 4th to 41st for returns – and what it means for stocks in 2025
NEARLY two months after US President Donald Trump roiled markets with his on-again, off-again 'reciprocal' tariffs and universal 10 per cent levy, uncertainty remains. My last column showed the illogic underpinning this – and counselled patience. Here is an update – and how to profit. Trump says America 'wins' through his tariffs, reclaiming 'lost' manufacturing jobs and cutting the trade deficit. No. Tariffs always hammer most the one who imposes them. Don't take my word for it. Look to the markets. For any good capitalist, this is step one. Markets are a lie detector, weighing talk, forecasts and opinions – and rendering verdicts. Non-US stocks were up 8.8 per cent this year to May 22. The Straits Times Index gained 4.9 per cent, a hair's breadth from all-time highs. China? Up 10 per cent. European stocks rose 13.7 per cent. Mexico, up 20.7 per cent. US stocks? Down 5.5 per cent – a striking lag. If we look at it another way: Of the 47 MSCI All-Country World Index (ACWI) nations, America was 41st in the ranking of countries by their year-to-date returns as at May 22. In the same period last year, America was fourth – with its 28.8 per cent return fully seven percentage points ahead of the ACWI. Why did US stocks go from No 4 to 41? The answer is No 47; the 47th president, that is. Trump's vacillations make funds flee America. Markets know that attempts to reduce the trade deficit are senseless. A trade deficit means a capital account surplus by definition – that capital is foreign investment in the US. 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 Why would reversing that be desirable? Why would the government intervening to favour American firms, instead of letting free markets sort out the most efficient use of capital, be considered positive? Why would policy that seemingly changes on a whim be considered good? Stocks are seeing through the smoke and mirrors. America's lag tells you those things are bad, not good. My last column noted how Trump justified his 90-day reciprocal tariff pause on Apr 9 on the grounds that some 75 nations sought deals. Many claimed that this revealed Trump's true aim. The president's fans could say that tariffs, confusion and uncertainty are solely a leverage to strike a flurry of deals – delivering even freer trade. However, the markets are looking at reality, not armchair psychobabble. Deals to make more deals Since Apr 9, just two tariff 'deals' have emerged – one with Britain and one with China. Both are fluff. Britain's is a one-year, non-binding agreement to mitigate tariffs until a full trade deal happens. A deal to make a deal. It affects only a handful of industries. Crucially, the 10 per cent universal levy remains on most UK goods, just like for those from Singapore. America's China deal looks bigger, but only because the bar was incredibly low. Yes, it cut 145 per cent tariffs on Chinese goods to 30 per cent, while China dropped retaliatory levies from 125 per cent to 10 per cent. However, the 'deal' lasts only 90 days and effectively just buys time. Another deal to make a deal. Plus, tariffs on China remain 30 percentage points higher than in January. Both countries are worse off, but especially America. Who wins from this? Maybe Singapore, via re-exporting. On May 16, Trump flip-flopped again. Boasting that 150 nations now seek 'deals', he said that there isn't time to negotiate them all. His 'solution'? Telling nations what rates they will pay – and offering chances to appeal. Didn't he already do that on 'Liberation Day' on Apr 2? How will it work? Will rates be higher, lower or the same as those on Apr 2? He did not say, further fanning uncertainty. Then, days later, he threatened the European Union with new 50 per cent tariffs – and 25 per cent on Apple products. More uncertainty. Meanwhile, legal challenges to Trump's tariffs progress. Maybe real deals will come that will actually lower trade barriers and uncertainty – a huge potential upside. Then again, maybe not. But as my last column said, even if all tariffs return, the pain will be less than feared – which will be bullish for markets. Importers can readily skirt America's understaffed, overwhelmed tariff-collecting Customs and Border Protection staff via both illegal and legal means. The latter include 'tariff splitting' – stripping out services-related costs such as marketing to reduce goods' values – or storing imports in bonded warehouses. Or, shipping in goods that are valued to be under US$800. And myriad illegal ways such as misclassifying and undervaluing goods. Or, as mentioned, exporters can 'tranship' or re-export via lower-tariff nations – such as Singapore. This is why China's April exports didn't tank despite shipments to America tumbling 21 per cent. South-east Asia gobbled up the difference – and shipped them on. It drove Singapore's huge, 113 per cent year-on-year spike in April re-exports to America. Vietnam and Taiwan are seeing similar surges. Shippers could further tap Canada or Mexico, gaming the US-Mexico-Canada Agreement's tariff exemption. Hence, while April's total tariff collections rose, they missed administration forecasts by 75 per cent. That will persist. Happily, fear exceeds the negative effects, especially outside America. For investors, that is a recipe for a bull market – with non-US stocks continuing to lead. The writer is the founder, executive chairman and co-chief investment officer of Fisher Investments, an independent investment adviser serving both individual and institutional investors globally
Straits Times
9 hours ago
- Business
- Straits Times
ST Engineering hits all-time high; stock picks roll in after MAS update on $5 billion equities boost
Shares of SGX climbed through the week to reach a high of $14.33 on May 30 before dropping abruptly by almost 2 per cent to close at $14.02. ST PHOTO: LIM YAOHUI SINGAPORE - Shares of ST Engineering hit an all-time high last week after rising by 4.3 per cent to close on May 30 at $7.82. The company's shares have been on a tear since the start of 2025, climbing more than 68 per cent on the back of record 2024 results and increased dividends over the period. It also reported a solid first quarter for 2025, driven by strong growth in its defence and public security segment. The strong share price performance came ahead of the weekend's anticipated annual defence-focused Shangri-La Dialogue in Singapore. Addressing the audience at the dialogue on May 31, US Defence Secretary Pete Hegseth suggested that US allies and partners in Asia should take their cue from Europe, where members of the North Atlantic Treaty Organisation are committing to spend 5 per cent of their gross domestic product on defence. Shares of Singapore Exchange (SGX) climbed through the week to reach a high of $14.33 on May 30 before dropping abruptly by almost 2 per cent to close at $14.02. No announcements were made on the day. Trading activity on the exchange has increased in recent months, driven by market revival measures announced in February and growing investor interest in Singapore stocks as a safe haven amid global volatility. Almost 29.5 billion shares worth around $41 billion were traded in April, up from around 26.8 billion shares valued at $29.6 billion traded in March, according to SGX data. The average daily value of shares traded in April, at $1.9 billion, is the highest level since March 2020. Analysts pick potential winners ahead of $5 billion boost Trading on the SGX has included shares in companies outside the benchmark Straits Times Index (STI), supported by a central bank-led programme to allocate $5 billion in seed capital to Singapore-based funds for investing in local, non-STI stocks. Announced in February as part of the measures to revive the stock market, the Equity Market Development Programme (EQDP) has received positive interest from global fund managers, and suitable investment strategies will be shortlisted by end-September, the Monetary Authority of Singapore (MAS) said last week. Analysts reckon the funds will likely be deployed before the end of 2025 and have been highlighting stocks they believe could benefit from this bonanza. SIA Engineering is one of their favourites, with CGS CIMB, UOB KayHian, DBS and Morgan Stanley including the company in their list of stock picks. They like the company as demand for its aircraft maintenance, repairs and overhaul services is expected to grow. Systems assembly provider Frencken Group and property agency PropNex are also among the analysts' top picks, owing to the companies' strong revenue forecasts for 2025. Other selected stocks include instant coffee maker Food Empire, finance platform iFast, precision engineering business UMS Integration, supermarket chain Sheng Siong, Raffles Medical, technology solutions provider CSE Global, palm oil producer First Resources, transportation giant ComfortDelGro and construction firm Hong Leong Asia. Some analysts also like Oiltek International, a provider of vegetable oil processing technology, and Centurion Corp, which operates workers' dormitories in Singapore. Both companies have seen their share prices climb since the start of 2025, driven in part by Oiltek's upcoming transfer from the Catalist board to the mainboard and the potential listing of a real estate investment trust (Reit) by Centurion. Analysts from UOB KayHian said they are now more bullish on the Singapore market as a result of the anticipated injection of liquidity from the EQDP, and have raised their forecast for the STI to 4,054 points by the end of 2025 from 3,720 points previously, implying an upside of 5 per cent from current levels. They noted, though, that 'it will be critical for the authorities to ensure that the $5 billion is not a one-off and that as the market grows, it will be able and willing to continue to lend its support'. More firms could leave the local bourse Two more companies announced moves that may impact their SGX listing status even as efforts are being made to boost market interest and attract new initial public offerings (IPOs). Singapore Paincare on May 27 received a privatisation offer from Advance Bridge Healthcare at 16 cents a share, valuing the company at about $27 million. The local medical services company will be delisted from the Catalist board if the deal is successful, it said. Meanwhile, Chinese manufacturer Fuxing China Group said on May 29 that trading in its American depositary shares would begin 'very shortly' after it received approval to list on the Nasdaq on May 23. When contacted by The Straits Times, Fuxing China Group declined to confirm whether it would maintain its SGX listing or provide further details on the Nasdaq move. In 2025 so far, at least 15 companies have received privatisation offers, compared with just one IPO. This is despite ongoing efforts to draw more companies to list on the SGX, including proposals announced on May 15 to ease the disclosure requirements for firms pursuing an IPO here. Other market movers Shares of Samurai 2K Aerosol jumped by over 52 per cent last week and closed on May 30 at 9.6 cents. The aerosol paint distributor said on May 28 it had agreed with its insurer on a RM16.06 million (S$4.9 million) indemnity claim for a May 2024 fire at its Johor premises. It can also claim an extra RM1.79 million if the damaged properties are repaired according to certain conditions and within a set timeline. The insurance claim had initially been declined due to non-compliance of the insurance policy terms, according to its insurer. However, Samurai 2K escalated the matter to the Malaysian central bank and engaged consultants to help it negotiate the claims. The company reported on May 30 after market close a 31.4 per cent jump in revenue for the year ended March 31, to RM104.9 million. However, it registered losses of RM7.8 million due to the write-off of inventory worth RM12.7 million and property damage totalling RM3.5 million as a result of the fire. The insurance claims receivable will be registered in 2026. Acrophyte Hospitality Trust (AHT) jumped 23.4 per cent last week and closed May 30 at 29 US cents. AHT's managers on May 30 said they were evaluating a 'range of strategic options' that could result in a 'potential transaction' involving AHT's stapled securities, although this is not guaranteed. Stapled securities are financial instruments where two or more different securities are contractually bound together and traded as a single unit. The AHT group comprises Acrophyte Hospitality Property Trust and Acrophyte Hospitality Management Trust. The strategic review comes in the light of potential spending needs to upgrade AHT's current properties. This involves upgrades to seven Marriott and Hyatt-branded hotels in 2025, after six other hotels were upgraded in 2024. It also comes after a similar move by Frasers Hospitality Trust (FHT) in April, following which FHT's sponsor Frasers Property made a second attempt to privatise the stapled group at 71 cents per stapled security in May. FHT comprises Frasers Hospitality Reit and Frasers Hospitality Business Trust. AHT was formerly known as ARA US Hospitality Trust before the manager changed hands to come under Acrophyte AM, a unit of Acrophyte, which largely consists of the businesses of the formerly listed Chip Eng Seng. The entities are all ultimately controlled by property tycoon Gordon Tang and his wife Celine, who have multiple interests in property and construction, including Suntec Reit and Singapore property developer SingHaiyi. What to look out for this week Shares of OKP Holdings, which rose 9 per cent last week, could see more trading activity – after the market closed on May 30, it announced a $258.3 million contract from the Land Transport Authority to construct cycling paths across 11 towns in the eastern part of Singapore. The win brings OKP's net contract order book to a record high of $735.8 million, with contracts extending until 2031. Oiltek could see more trading, too. The company will officially transfer from Catalist to the SGX mainboard on June 6. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
3 days ago
- Business
- Straits Times
Singapore stocks fall as Trump tariffs resumes for now; STI retreats 0.6%
The STI was led by DFI Retail Group, which rose 3 per cent to US$2.76. PHOTO: ST FILE Singapore stocks fall as Trump tariffs resumes for now; STI retreats 0.6% SINGAPORE – The Trump tariff roller-coaster took another swing through markets on May 30 and helped depress shares across the region. The latest twist in the seemingly never-ending saga came when a US appeals court paused a ruling that blocked President Donald Trump's sweeping tariffs, and in turn stopped Thursday's rally dead in its tracks. That left the benchmark Straits Times Index (STI) down 0.6 per cent or 22.23 points to 3,894.6 with losers beating gainers 248 to 209 on trade of 1.3 billion securities worth $3.3 billion. Ms Ipek Ozkardeskaya, analyst at Swissquote Bank, said the optimism triggered by the initial ruling that halted the 'Liberation Day' tariffs 'turned out too good to be true' as it is now effectively on hold. 'If tariffs are ultimately found to be unlawful, the willingness of partners to make concessions during trade talks may shrink – not exactly ideal, especially given the critical window for negotiations,' she added. Regional indexes reacted negatively. Hong Kong's Hang Seng lost 1.2 per cent, South Korea's Kospi fell 0.8 per cent, the Nikkei 225 in Tokyo declined 1.2 per cent and Malaysian shares slipped 0.7 per cent. By contrast, Wall Street shrugged off the tariff news overnight and focused more on tech stocks after Nvidia posted robust earnings. The Nasdaq and S&P 500 both rose 0.4 per cent while the Dow Industrials added 0.3 per cent. Meanwhile, the STI was led by DFI Retail Group, which rose 3 per cent to US$2.76. After the market closed, the group said it will divest a 22.2 per cent stake in Robinsons Retail. DFI parent company Jardine Matheson did not fare so well, falling 2.4 per cent to US$44.50, after announcing that chief executive John Witt is retiring at the end of November. The local banks were in the red: DBS fell 0.6 per cent to $44.72; UOB declined 1.2 per cent to $35.41; and OCBC retreated 1 per cent to $16.23. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
3 days ago
- Business
- Business Times
Singapore stocks fall as Trump tariffs resume for now; STI retreats 0.6%
[SINGAPORE] Local equities ended Friday (May 30) lower, after an appeals court in the United States paused a ruling that blocked President Donald Trump's sweeping tariffs. The benchmark Straits Times Index declined 0.6 per cent or 22.23 points to 3,894.6. Across the broader market, decliners beat gainers 248 to 209, as 1.3 billion securities worth S$3.3 billion changed hands. Singapore Exchange market strategist Geoff Howie said: 'The session ended with a bout of S$2.23 billion of institutional rebalancing related to the MSCI Quarterly Index Review on the close. 'Supporting the high turnover on the close, Singapore-listed stocks have both increased their weightage and comparative trading turnover within the MSCI Asia Ex-Japan Index since the end of 2024.' The US appeals court on Thursday paused a ruling from the Court of International Trade, which found that Trump did not have the authority to impose the 'Liberation Day' tariffs. 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 Ipek Ozkardeskaya, analyst at Swissquote Bank, said the early trade optimism triggered by the US Court of International Trade's ruling 'turned out too good to be true' as the ruling is now effectively on hold. 'If tariffs are ultimately found to be unlawful, the willingness of partners to make concessions during trade talks may shrink – not exactly ideal, especially given the critical window for negotiations,' she said. Regional indices reacted negatively to the news. Hong Kong's Hang Seng Index lost 1.2 per cent. South Korea's Kospi fell 0.8 per cent, while Japan's Nikkei 225 declined 1.2 per cent. The Bursa Malaysia Kuala Lumpur Composite Index decreased 0.7 per cent. In Singapore, the STI was led by pan-Asian retailer DFI Retail Group , which added 3 per cent or US$0.08 to US$2.76. After the market closed, the group announced it will be divesting a 22.2 per cent stake in department store operator Robinsons Retail. The index was dragged by DFI's parent company Jardine Matheson , which declined 2.4 per cent or US$1.10 to US$44.50. This comes after the group on Thursday announced that its chief executive John Witt is retiring from the company at the end of November, with Lincoln Pan to take on the role of CEO-designate. The trio of local banks were in the red on Friday. DBS fell 0.6 per cent or S$0.27 to S$44.72, UOB declined 1.2 per cent or S$0.43 to S$35.41 and OCBC retreated 1 per cent or S$0.16 to S$16.23.
Business Times
3 days ago
- Business
- Business Times
Singapore stocks fall as Trump tariffs resumes for now; STI retreats 0.6%
[SINGAPORE] Local equities ended Friday (May 30) lower, after an appeals court in the United States paused a ruling that blocked President Donald Trump's sweeping tariffs. The benchmark Straits Times Index declined 0.6 per cent or 22.23 points to 3,894.6. Across the broader market, decliners beat gainers 248 to 209, as 1.3 billion securities worth S$3.3 billion changed hands. Singapore Exchange market strategist Geoff Howie said: 'The session ended with a bout of S$2.23 billion of institutional rebalancing related to the MSCI Quarterly Index Review on the close. 'Supporting the high turnover on the close, Singapore-listed stocks have both increased their weightage and comparative trading turnover within the MSCI Asia Ex-Japan Index since the end of 2024.' The US appeals court on Thursday paused a ruling from the Court of International Trade, which found that Trump did not have the authority to impose the 'Liberation Day' tariffs. 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 Ipek Ozkardeskaya, analyst at Swissquote Bank, said the early trade optimism triggered by the US Court of International Trade's ruling 'turned out too good to be true' as the ruling is now effectively on hold. 'If tariffs are ultimately found to be unlawful, the willingness of partners to make concessions during trade talks may shrink – not exactly ideal, especially given the critical window for negotiations,' she said. Regional indices reacted negatively to the news. Hong Kong's Hang Seng Index lost 1.2 per cent. South Korea's Kospi Composite Index fell 0.8 per cent, while Japan's Nikkei 225 declined 1.2 per cent. The Bursa Malaysia Kuala Lumpur Composite Index decreased 0.7 per cent. In Singapore, the STI was led by pan-Asian retailer DFI Retail Group , which added 3 per cent or US$0.08 to US$2.76. After the market closed, the group announced it will be divesting a 22.2 per cent stake in department store operator Robinsons Retail. The index was dragged by DFI's parent company Jardine Matheson , which declined 2.4 per cent or US$1.10 to US$44.50. This comes after the group on Thursday announced that its chief executive John Witt is retiring from the company at the end of November, with Lincoln Pan to take on the role of CEO-designate. The trio of local banks were in the red on Friday. DBS fell 0.6 per cent or S$0.27 to S$44.72, UOB declined 1.2 per cent or S$0.43 to S$35.41 and OCBC retreated 1 per cent or S$0.16 to S$16.23.
