The Hang Seng Index rose 2.07% last week. Analysis: Market focus may shift from interest rates to tariff threats | Lianhe Zaobao

After experiencing a downturn at the end of July, the FTSE Straits Times Index in Singapore rebounded in the past week, achieving four consecutive days of gains, with a decline only on Friday (August 8), closing at 4,239.83 points. Overall, the index rose by 2.07% last week.

Geoff Howie, a market strategist at the Singapore Exchange, analyzed that when including dividend yields, the total return of the index last week was approximately 2.5%, bringing the total return from the beginning of the year to August 8 to 15.5%.

Liu Ziyuan, a stock investment advisor at Phillip Securities, stated in an interview that the strong performance of the index was driven by gains in the banking sector led by DBS Group, while the low interest rate outlook boosted the real estate sector.

Howie pointed out that the iEdge Singapore Real Estate Investment Trust Index (iEdge S-REIT Index) had a return of 1.9% last week, reflecting the impact of changes in the U.S. interest rate policy on the Singapore stock market.

Regarding the decline on Friday, Liu Ziyuan believed that some investors attributed the strong performance of the index to the anticipated rally on National Day (September 9), "thus choosing to close positions on Friday to lock in profits."

Analysis: Over 30 Companies Queue for IPOs Reflect Market Confidence

He also mentioned that as long as the index remains above 4,000 points, market confidence will persist. "Moreover, we can see that the number of initial public offerings (IPOs) on the Singapore Exchange is increasing. It is reported that over 30 companies are queued for IPOs, which also reflects market confidence."

However, looking ahead to the market's future development, Qiu Yuanzhi, head of sales trading at Saxo Markets Singapore, believes that the impact of tariff threats and changes in trade policies is one of the key influencing factors.

Further Reading

Expectations for Fed Rate Cuts Strengthen, Index Rises for Four Consecutive Days by 0.72% Various Positive Factors Support Stock Market, Analysts Raise Year-End Index Targets Qiu Yuanzhi told Lianhe Zaobao that the second-quarter performance of three Singapore banks showed divergence. DBS Group's performance exceeded expectations, pushing its stock price to rise over SGD 50, setting a new high. However, moving forward, one of the main risk factors investors must consider when focusing on bank stocks is the threat of tariffs.

"We will see a slowdown in business activities due to tariff impacts, and as companies reduce investments, banks will also be affected. Among the three banks, the one with the most diversified business will emerge as the winner."

However, he also mentioned that some non-bank constituents of the Straits Times Index have also performed well, such as ST Engineering, Singtel, and Sembcorp Industries, which are typically stocks that can perform well during periods of economic uncertainty. Qiu Yuanzhi added that as long as U.S. tariffs remain uncertain, safe-haven funds will continue to flow into Singapore.

Tariffs in the semiconductor and pharmaceutical sectors may affect market sentiment

Qiu Yuanzhi added that it is important to note that the U.S. has recently begun to expand the scope of tariffs to the semiconductor and pharmaceutical sectors, which may impact Singapore's export growth: "This could shock market sentiment in Singapore, thereby affecting the Straits Times Index's performance."

Huo Wei also believes that the market's focus on the global interest rate outlook is gradually fading, while changes in U.S.-led semiconductor tariffs and exemptions may become the focal point. The upcoming Tuesday (12th) will be particularly critical, as the U.S. will release the Consumer Price Index (CPI) data for July, and the "90-day tariff truce" between China and the U.S. will expire on that day.

In terms of individual stock news, Thomson Medical Group issued a profit warning on Friday evening, expecting to continue incurring losses in the second half of the fiscal year 2025 ending in June, mainly due to increased interest expenses from the acquisition of Far East Medical Vietnam Limited (FEMVN), the termination of Singapore projects, and weak performance in the Malaysian market. The group's stock price closed at SGD 0.053 on Friday, down 3.64%.

Grand Venture Technology announced on Saturday that Dutch company Aalberts Advanced Mechatronics intends to acquire all shares of the company at a price of SGD 0.94 per share, which has received in-principle approval from the Singapore Exchange. The acquirer belongs to the semiconductor business division of the Dutch listed company Aalberts, and after the transaction is completed, it plans to delist Grand Venture Technology from the main board of the Singapore Exchange, reportedly to have greater control and flexibility in managing and optimizing resources. Grand Venture Technology's stock price closed at SGD 0.93 on August 8, up 0.54%