Middle East tensions cap STI’s recovery

Date: June 16, 2025

• Israel’s attack on Iran sent stocks diving, STI down 0.6% for the week
• Wall St buckled as oil prices surged, Brent crude at US$74 per barrel
• All eyes on the Fed for Wednesday’s interest rate decision, no change expected
• “Sell America, buy Singapore (among others)’’: Maybank
• Centurion hits all-time high after REIT announcement
• Ho Bee Land in play on privatization speculation as owner upped stake
• Offer for 10% of Cordlife is unfair and unreasonable: IFA

 

Fears of full-blown Middle East conflict drags stocks down

Israel’s attack on Iran’s nuclear facilities on Thursday sent oil prices surging and stock markets falling. The Straits Times Index, which looked to on a firm footing above the 3,900 level, wobbled on Friday and eventually recorded a net loss of 23 points or 0.6% at 3,911.42 for the week.

Oil prices took off, fuelling inflation concerns – all three US indices close lower

Brent crude, the international benchmark, was up 7% on Friday to US$74.23 per barrel after rising more than 10% shortly after Thursday’s attack. Analysts say oil prices could surge to more than US$100, and perhaps as high as US$120, if the conflict grows substantially. That would cause gasoline prices and inflation to spike.

It also overshadowed progress on the trade front. President Donald Trump on Wednesday declared that a deal with China was “done, subject to final approval” from him and the Asian nation’s leader, Xi Jinping. The terms include China providing rare earths to the US, a factor that has been a wrangling point in negotiations before.

For the week, the S&P 500 slipped -0.4%, while the tech-heavy Nasdaq Composite shed -0.6%. The blue-chip Dow fell -1.3%.

All eyes on the Fed for Wed’s FOMC

Wall Street will be paying close attention to the conflict over the weekend. When traders return, they’ll also have to gear up for Wednesday’s interest-rate decision from the Federal Reserve.

“The Federal Reserve has relied on mixed data and intense policy uncertainty to rationalize a wait and see approach,” Dave Donabedian, co-chief investment officer of CIBC Private Wealth, told US newspaper Barron’s.

“It has worked so far. The Israel-Iran turmoil adds more uncertainty, and another reason for the Fed to continue their ‘don’t just do something, stand there’ approach’’.

As of Friday, the futures market was pricing in a 99.6% chance that interest rates will held steady by the Fed.

“Sell America, buy Singapore (among others)’’: Maybank

In a 9 June report, Maybank said the “Sell America” trade may gather fresh momentum from moderating US job growth numbers, and sluggish services and manufacturing data whilst the Trump-Musk bust-up adds to the mix.

“Our Macro Team thinks these will continue to fuel a USD decline and favours a ‘sell-on-rally’ trading strategy.  On the other hand, ASEAN currencies are likely to see further appreciation as global investors look to diversify risks. Major regional currencies – SGD, MYR, THB and IDR – should trend stronger this year, according to the team’’ said Maybank.

“Regional Strategist Anand Pathmakanthan thinks this momentum will extend to regional equities as well. Most ASEAN markets have seen sharp rebounds from steep losses after reciprocal tariff announcements in April. Easing macro headwinds and tariff landing optimism has have seen positive turnarounds for Indonesia and Vietnam, while Singapore and Malaysia are also holding up. Anand is reiterating his OVERWEIGHT on Singapore given domestic resilience and safe haven status…’’.

Centurion hits all-time high after REIT announcement

Shares of Centurion Corp which builds worker and student accommodation rose sharply on Wednesday after the company announced its listing application of a real estate investment trust (REIT) to the Singapore Exchange (SGX) and the Monetary Authority of Singapore.

Centurion said that the application was still under review, but the REIT it is aiming to establish will comprise some of the group’s worker and student accommodation assets.

The company noted that the details of the initial public offering (IPO) and proposed establishment are still being finalised.

“The listing of the Reit will be subject to, among other things, market conditions, commercial negotiations, the relevant regulatory, shareholders’ and other approvals being obtained, and the execution of definitive agreements by the relevant parties,” it added.

Shares of Centurion closed 3.4% or S$0.05 higher at an all-time high of S$1.53 on Wednesday following the announcement but finished the week at S$1.49.

Ho Bee Land in play on privatization speculation as owner upped stake

Shares of Ho Bee Land were in play last week after the company said founder and executive chairman Chua Thian Poh upped his stake in the real estate company over the weekend.

On Jun 5, Ho Bee Holdings, a vehicle controlled by Chua, acquired 137,900 shares for S$248,220, or S$1.80 per share, raising his stake in the company from 75.66 to around 75.68%.

Both Chua, 76, and his son Nicholas Chua, 49, who is chief executive officer, have been accumulating shares in the last few months. Since May 14, the elder Chua has bought a total of 366,100 shares for a total of S$652,763. This translates to an average price of S$1.783 per share.

The Business Times on Monday ran an article titled “Is Ho Bee Land privatisation back on cards with founder Chua Thian Poh raising stake?’’ in which it said Ho Bee Land’s current share price is far below its net asset value per share, which its 2024 annual report put at S$5.56. The counter is also significantly below its all-time high of S$3.08 in April 2022.

Ho Bee Land holds almost S$5.2 billion in investment properties, of which S$2.8 billion worth are freehold, and is widely known as the pioneer of luxury residential developments in Sentosa Cove. Its assets include The Metropolis, a Grade A office building in the one-north commercial hub.

Offer for 10% of Cordlife is unfair and unreasonable: IFA

The independent financial adviser (IFA) assessing the offer to acquire a stake in Cordlife Group has concluded that the offer is unfair and unreasonable, and has recommended that shareholders reject it.

Thailand’s Medeze Group, which is among South-east Asia’s largest stem cell storage and services provider on 13 May announced plans to take a 10% stake in Cordlife or 25.63 million shares, at S$0.25 per share.

If the offer is successful, Medeze Group, which already has 0.68% of Cordlife, will own a 10.68% per cent stake in the company.

Novus Corporate Finance, the IFA said that the offer price represents a discount to the volume-weighted average price of the shares after the last trading day and up to the latest practicable date.

It also noted that the offer price represents a discount to the closing price of the shares as at the latest practicable date.

The IFA further added that the offer price represents a discount to the net asset value and net tangible asset per share as at Dec 31, 2024.

The offer price is also lower than the estimated fair value range of 47.8 cents to 58.8 cents for each share.

As a result, the IFA has advised the recommending directors to recommend that shareholders do not accept the partial offer.

The Securities Investors​ Association (Singapore), or SIAS said that it is important for shareholders to note that the offer by Medeze is a partial offer for only 10% of Cordlife’s shares.

“This is very distinct from a delisting offer or going private offer. So there is no risk that the company will be delisted as a result of Medeze’s offer’’.

“The shares will remain listed and tradeable on SGX regardless of the outcome, preserving liquidity and allowing shareholders to continue trading based on their independent views,” SIAS told The Straits Times.