Monthly Market Wrap: Banking on a Sep US interest rate cut

Date: September 1, 2025

• The STI rose 2.3% in Aug to 4,269.70 on hopes of a Sep rate cut
• Probability that the Fed will lower rates is now 87%
• DBS rose to all-time high above S$50, most analysts called “buy’’
• Sembcorp reported 1% fall in 1H profit; shares plunged 22% for the month
• Telco consolidation was in focus
• Thomson Medical in play after news of JS-SEZ mega project, shares remained firm despite reporting a 1H loss
• Singapore Paincare postponed scheme meeting after call by SIAS to do so

 

Rising ahead of the Sep FOMC

For the month of August, the Straits Times Index gained about 96 points or 2.3% at 4,269.70, mainly thanks to investors banking on the US Federal Reserve cutting interest rates at its 17 Sep Federal Open Markets Committee (FOMC) meeting.

Last week’s gain was about 16 points or 0.4%. Despite the gain, signs of caution emerged as the week progressed in the lower volume done – from S$1.85b done on Monday to S$1.37b on Friday.

The main focus was the Fed’s annual meeting in Jackson Hole, Wyoming in the third week at which Fed chair Jerome Powell opened the door for rate cuts when he said the labour market might be softening enough to rein in inflation that is being pushed up by tariffs.

He did however, warn that the effects of tariffs on consumer prices are now clearly visible.  “We expect those effects to accumulate over coming months, with high uncertainty about timing and amounts. The question that matters for monetary policy is whether these price increases are likely to materially raise the risk of an ongoing inflation problem’’ said Mr Powell.

Despite this ambivalence, the futures market has now started pricing in an 87% probability of a 25-basis points interest rate cut in Sep.

Wall St rose to all-time highs, chip makers released unimpressive results

The S&P 500 notched its 19^th and 20^th record highs for the benchmark index this year last week. However, a decline in semiconductor stocks after disappointing earnings countered largely favourable economic data.

Nvidia, the world’s largest chipmaker, highlighted the week with its quarterly report. Despite its results indicating that the artificial intelligence spending boom was still accelerating, investors fretted over its conservative revenue guidance and its assumption of no further sales of its chips to China. Other chip bellwethers, such as Marvell Technology, also failed to impress with their earnings.

For the week, the S&P 500 slipped 0.1%. The blue-chip Dow Jones Industrial Average and the tech-heavy Nasdaq both fell 0.2% each.

DBS rose to an all-time high above S$50

DBS on Thursday reported a year-on-year rise of 1% in net profit to S$2.82 billion for its second quarter ended 30 June, beating the S$2.79 billion consensus forecast in a Bloomberg survey of six analysts.

This prompted a flurry of “buy’’ calls from analysts – Maybank set a target price of S$56.15, Goldman Sachs’s target is S$57.20 and Citi’s is S$56.50. As a result, the stock crossed S$50 for the first time ever, reaching a closing high of S$51.45 on 13 Aug before closing the month at S$50.52.

For the four weeks it gained S$2.61 or 5.4%.

Sembcorp reported 1% fall in 1H profit; shares plunged 22% for the month

For the half-year ended Jun 30, Sembcorp posted a 1% fall in net profit to S$536 million that came on the back of an 8% fall in revenue to S$2.9 billion due to lower turnover from its gas business.

Sembcorp’s share price fell by as much as 15.6% to hit a low of S$6.58 on the day of the announcement. It eventually ended the day at S$6.72, down 13.9%.

The selling continued and the shares ended the month at S$6.07 for a loss of S$1.69 or 22% over the four weeks.

Telcos were in focus

Singapore’s telcos were in focus during the month, starting with Singtel’s announcement of a higher net profit for its first quarter ended Jun 30, 2025, at S$2.9 billion, up 317.4% from S$690 million in the year-ago period, mainly from exceptional gains amounting to around S$2.2 billion from the sale of its partial stake in Airtel and the Intouch-Gulf Energy merger.

This was then followed by news that Keppel is proposing to divest M1’s telco business to mobile network operator Simba Telecom for an enterprise value of S$1.43 billion, in an all-cash deal surprising observers who had expected the sale to go to Starhub.

Keppel will receive close to S$1 billion in cash for its 83.9% effective stake in M1. The deal will, however, result in an estimated S$222 million accounting loss for Keppel due to goodwill and intangible assets associated with the telco business. Keppel first invested in M1 in 1994, and was later involved in its privatisation in 2019.

StarHub’s then announced that net profit fell 41.7% to S$47.9 million for the first half ended 30 June, the figure includes a one-off forfeiture payment of S$14.1 million for the return of certain spectrum rights. Earnings per share declined 43.8% to S$0.026.

StarHub also announced that it is buying the rest of MyRepublic’s broadband business that it did not already own for S$105.2m, making the latter now a wholly-owned subsidiary.

Thomson Medical in play after news of JS-SEZ mega project, shares remained firm despite reporting a 1H loss

Thomson Medical’s shares rose on Tuesday last week after the group unveiled plans for a RM18 billion (S$5.5 billion) development in the Johor-Singapore Special Economic Zone (JS-SEZ).

The counter shot up to an intraday high of S$0.068 in early trade on Tuesday, 38.8% or S$0.019 higher than its closing price of S$0.049 on Monday. This was the highest price it had reached in more than one-and-a-half years. It last traded above such levels in 2023, ShareInvestor data showed.

The stock closed the day at S$0.06, still up by 22.4% or S$0.011, its highest closing price in more than one year, on volume of more than 200m traded. They ended the week at S$0.061 despite the company announcing a net loss of S$34.7 million for its six months ended Jun 30, compared with a net profit of S$12.1 million in the previous corresponding period.

The loss was despite a 6.9% uptick in revenue to S$195.6 million. Thomson Medical attributed the loss to a one-off impairment loss on goodwill arising from the acquisition of its Vietnam unit.

Singapore Paincare postponed scheme meeting after call by SIAS to do so

Medical services company Singapore Paincare last week postponed an Aug 28 scheme meeting to vote on a privatisation offer after a call by the Securities Investors Association (Singapore) or SIAS.

Shareholders had been set to vote on the offer at a meeting on Aug 28 at 2pm. A new date for the meeting has not yet been determined.

Singapore Paincare added that existing proxy forms that have been submitted for the scheme meeting will be disregarded and shareholders will need to resubmit fresh proxy forms for the adjourned meeting.

The move comes after SIAS criticised the company over two WhatsApp messages sent to shareholders ahead of the meeting – one on Aug 16 summarising the offer and encouraging support for the delisting, and another on Aug 21 reminding them of the proxy form deadline.

Both were signed by Singapore Paincare chief executive officer Bernard Lee and chief operating officer Jeffrey Loh.

Sias said the WhatsApp messages were a breach of rule 8.6 of the code on takeovers and mergers which says that except with the Securities Industry Council’s (SIC) consent, campaigns involving direct shareholder contact can be conducted only by financial adviser staff familiar with the code’s requirements.

Given that the messages were sent before proxy submissions closed, SIAS questioned the accuracy and fairness of the decision made by some of the shareholders who may have been influenced by its content.

Sias also cautioned shareholders of Singapore Paincare to decide on the privatisation offer by reading the independent financial adviser (IFA) report.

In May, the Catalist-listed company received an acquisition bid of 16 cents a share from Advance Bridge Healthcare, a healthcare management consultancy. This was 27 per cent below its initial public offering price of 22 cents a share in 2020. The counter was last traded at 14 cents before the offer was announced.

Singapore Paincare and Advance Bridge Healthcare earlier on Aug 25 had asked shareholders to “disregard and ignore” the WhatsApp messages as they were sent without the consent of the SIC.

Their boards noted that the messages had urged shareholders to “take a certain course of action to facilitate the scheme and highlighted only certain information in relation to (its) merits”.

They also pointed out that Dr Lee and Dr Loh have a conflict of interest, as both are major shareholders of the offeror and senior executives of the company. The SIC had exempted them from giving any recommendations on the scheme, meaning they should not have signed the messages.

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