Monthly Market Wrap: Despite a shaky, tariff-stricken Wall Street, the STI rose 2% in March, crossed 4,000 for first time in history

Date: April 1, 2025

• For the month, the STI added 2% at 3,972.43
• On 28 March, the STI traded above 4,000 for the first time ever
• On 26 March, the STI closed an all-time high of 3,981.57
• Wall Street continued to be dogged by tariff-related worries
• All three major US indices fell sharply over the month
• Wall St’s main worry now is tariff-induced stagflation
• During the month the US Fed kept rates unchanged, things inflation could be “transitory’’ and signalled possibly two cuts this year
• DFI to sell Singapore food businesses to Malaysia’s Macrovalue
• Frasers Centrepoint Trust to buy rest of Northpoint City for S$1.17 billion
• Indonesia’s Widjaja family moves to delist Sinarmas Land
• February’s factory output fell an unexpected 1.3%

 

The STI crossed 4,000 in intraday trading on 28 March

The month kicked off on a soft note with Wall Street rocked by worries that the widespread tariffs threatened by the Trump administration, mainly on Canada, Mexico and China would trigger a recession.

This worry was bolstered by weak consumer confidence figures and GDP estimates that pointed to a sharp impending slowdown.

As the month progressed, these fears first took greater grip, to the point that US stocks gave up all the gains they had made since Trump’s election victory.

In the third week they had eased somewhat, possibly thanks to US Federal Reserve chairman Jerome Powell’s statement at the March Federal Open Markets Committee meeting that he believes any tariff-introduced inflation is likely to be “transitory’’.

As a result, US stocks ended a four-week losing streak by the third week of March; however, the selling resumed last week after economic data suggested the economy could become mired in stagflation – stagnant growth amidst rising inflation – due to the tariffs.

Still, despite a rocky Wall Street, the Straits Times Index powered upwards, propelled by gains in the banks, ST Engineering and Singtel. Last Friday, the final trading day of March, it briefly crossed the 4,000 mark for the first time in history, before closing at 3,972.43 for a nett gain of 77 points or 2% for the month.

For the week, its gain was 46 points or 1.1% whilst for the first quarter, the STI rose 185 points or 4.9%. On Thursday last week it reached a record closing high of 3,981.57.

How Wall Street fared – weakness again amidst stagflation worries

Last week the S&P and Nasdaq fell for the seventh week in the past nine, and the two indexes are on track for their worst months since 2022.

On Friday, the S&P 500 marked its second-worst daily decline of the year. The Nasdaq marked its fifth decline of 2% or more this month—the most since the index did so six times in June 2022, according to Dow Jones Market Data.

The core personal consumption expenditures price index came in hotter than expected, while the University of Michigan’s survey showed consumer sentiment dropped again in March while inflation expectations rose.

US newspaper Barron’s said Rosenberg Research’s David Rosenberg titled a Friday note “Lots of ‘Stag’ and Lots of ‘Flation’ in Friday’s US data.

“Even before the tariffs, inflation showed signs of a comeback, while cracks are clearly surfacing in the high-end consumer space,” Rosenberg wrote.

Andrew Brenner, head of international fixed income at NatAlliance Securities, titled a Friday note to clients “Stagflation Is Here…One Year Michigan Inflation Hits 5%..Sentiment Lower’’.

“We watched Peter Navarro, the person behind the Trump tariffs, and he really believes that tariffs will force manufacturing back to this country … maybe in 10 years, but to what disastrous consequences in the meantime?” said Brenner.

For the month, the Dow Jones Industrial Average lost 5.1%, the S&P 500 fell 6.3% and the Nasdaq Composite plunged 8.1% whilst their respective losses for the week were 1%, 1.5% and 2.6%.

The US Federal Reserve kept rates unchanged, signalled two possible cuts this year

As expected, the US Federal Reserve kept interest rates unchanged at its March Open Markets Committee meeting.

However, Fed chair Jerome Powell said uncertainty over how the Trump administration’s policies are implemented is making it challenging for policymakers to make forecasts on inflation, economic growth, and unemployment for the years ahead.

Still, Powell also said that inflation resulting from tariffs could be “transitory,” but added further progress in reducing inflation this year could be delayed as a result of the levies.

The potential for inflation to be a passing problem could be one reason why the Fed is still forecasting only two rate cuts this year, even though the bank expects higher unemployment and slower economic growth, according to the Summary of Economic Projections.

US car tariffs announced last week were the latest

President Donald Trump last week said he would place 25% tariffs on all cars and certain car parts made outside of the U.S., a much wider net than auto makers had expected. The levies will go into effect on April 2.

US car maker stocks were lower after the president’s announcement. Shares of Ford Motor and General Motors were down 3% and 5.1%, respectively. Tesla shares were 0.4% higher, and Stellantis shares were off 4.3%.

According to news reports, the industry was hoping for much better news, such as a delay in the implementation, a lower percentage, or carve-outs.

“The auto sector doesn’t look ready for the proposed tariffs and the stakes coming into the tariff announcement were already high. Trump’s tariffs on Canadian and Mexican imports threatened to upend the auto industry, destroying billions in profits. That remains the case, but now other auto makers importing vehicles from Europe and Asia face a similar fate’’ said US newspaper Barron’s on Thursday.

DFI to sell Singapore food businesses to Malaysia’s Macrovalue

Supermarket and retail store operator DFI Retail Group announced the divestment of its Singapore food business to South-east Asian retail conglomerate Macrovalue (Malaysia).

Macrovalue will buy Cold Storage Singapore, which comprises 48 Cold Storage stores (under the Cold Storage, CS Fresh and Jason’s Deli brands), 41 Giant stores, as well as two distribution centres.

The initial purchase price is S$125 million – subject to adjustments, with the transaction expected to complete in the second half of 2025, said DFI.

Following the divestment, DFI will pivot its focus and resources in Singapore towards the Guardian and 7-Eleven businesses to drive further growth, improved customer experience and enhanced returns.

There are over 120 Guardian stores and more than 450 7-Eleven outlets in the Republic.

Founded in 2022, Macrovalue is a special-purpose vehicle equally owned by Malaysian businessmen and entrepreneurs Andrew Lim and Gary Yap.

The pair are leaders in the retail and supermarket industry. In 2002, Lim spearheaded the management buyout of Sogo Kuala Lumpur, a struggling department store at the time, and transformed it into a profitable and thriving retail business.

Yap, on the other hand, launched his own supermarket in 1988. After decades of retail, engineering and construction experience, he founded RDS Marketing Malaysia, which specialises in retail design and fit-out.

Frasers Centrepoint Trust to buy rest of Northpoint City for S$1.17 billion

Frasers Centrepoint Trust announced that it has entered into unit purchase agreements with FCL Amber and Bright Bloom Capital to acquire the South Wing of Northpoint City for S$1.17 billion.

This will be done through the acquisition of all the units in North Gem Trust (NG Trust), which is a private trust that holds the interests in the South Wing of Northpoint City.

FCL Amber is a wholly owned subsidiary of Frasers Property while Bright Bloom is a wholly owned subsidiary of TCC Prosperity. TCC Prosperity is a company wholly owned by Thai billionaire Charoen Sirivadhanabhakdi and the estate of the late Wanna Sirivadhanabhakdi in equal shares.

Indonesia’s Widjaja family moves to delist Sinarmas Land

Indonesia’s billionaire Widjaja family has made a voluntary unconditional cash offer for all the shares in Sinarmas Land that it does not already own at S$0.31 apiece, valuing the property developer at S$1.32 billion.

The offeror, Lyon Investments – which counts executive chairman Franky Oesman Widjaja, chief executive officer Muktar Widjaja and Margaretha Natalia Widjaja among its directors – currently holds about 70.3% of the total number of issued shares in Sinarmas Land.

The offer price represents a premium of about 17.1, 5.6 and 14.6% over the volume weighted average price of the shares over the last one, three and 12-month periods, respectively.

However, it is at a 73.9% discount to Sinarmas Land’s net asset value of S$1.19 per share as at Jun 30, 2024.

Trading in shares of Sinarmas Land will be suspended should less than 10% of its total number of shares be held in public hands at the end of the offer.

The offeror said that, in this event, it does not intend to support or take any step for the public float to be restored or for any trading suspension to be lifted, adding that it intends to exercise its right of compulsory acquisition, should it manage to acquire at least 90% of shares it did not already own before the offer.

February’s factory output fell an unexpected 1.3%

The Republic’s manufacturing output fell 1.3% year on year in February, breaking its seven-month expansion streak after the biomedical and electronics clusters fell into contraction.

This missed private-sector economists’ forecasts of a 7% expansion, in a poll by Bloomberg. February’s data was also a sharp reversal from January’s revised growth of 8%.

Excluding the volatile biomedical sector, February’s industrial production rose a slight 0.3% on the year. This was, however, a sharp moderation from January’s revised growth of 6%.

“It bears watching if the February disappointment in the manufacturing output data was transient and potentially attributable to the Trump-related tariff uncertainties after his inauguration on Jan 20,” said OCBC chief economist Selena Ling in a Business Times report.

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