Monthly Market Wrap: The post “tariff tantrum’’ rebound continued in June, STI up 1.8%

Date: July 1, 2025

• Stocks have now regained all ground lost in April, STI up 1.8% in June
• Tariff concessions, Middle East ceasefire and all-time high for Wall St have boosted sentiment
• Positive IPO developments in June with two big listings announced
• OCBC made conditional offer of S$30.15 per GE share to delist GE
• Offer for 10% of Cordlife deemed “unfair and unreasonable’’, eventually falls short
• Singtel’s Optus reached settlement over alleged sales misconduct, including A$100 million proposed penalty
• Singapore’s market cap to double by 2030: Morgan Stanley

 

STI’s recovery continued in June, index up 1.8%

Perhaps the most notable feature of June’s trading in local stocks is how quickly prices have rebounded from the “tariff tantrum’’ that markets suffered from in April.

For the month, the Straits Times Index gained about 70 points or 1.8%  at 3,964.29, helped mainly by the US administration’s backing off from the punitive tariffs it threatened to impose on dozens of countries in April and a trade deal of sorts struck with China. For the year to date, the STI gained 177 points or 4.7%.

Also helping was news of a ceasefire between Israel and Iran following the US’s entry into the fray in the middle of the month when it bombed Iran’s nuclear sites.

Yet another factor behind the market’s strong showing is Wall Street where based on Monday’s close, the S&P 500 and Nasdaq Composite ended at all-time highs whilst the Dow Jones Industrial Average was within 2% of a new high.

The S&P 500 and Nasdaq each rose 5.5% in the first half of the year. The Dow lagged behind with a gain of 3.6%.

On the interest rate front, the US Federal Reserve last month maintained its “wait-and-see’’ stance as it kept interest rates unchanged whilst it waits for more data on the tariff, inflation and economic fronts.

From the recent low of 3,393 on 9 April, the STI has now regained 571 points or 16.8% in about 11 weeks.

Positive IPO developments in June

Last week saw good news on the initial public offer (IPO) front, with NTT filing to list a Reit – likely to Singapore’s largest in a decade – and software company Info-Tech Systems debuting this week the first mainboard listing in two years.

Earlier, interior fit-out business Lum Chang Creations lodged a preliminary prospectus for a Catalist listing on SGX. This follows its spin-off from mainboard-listed Lum Chang Holdings, finalised upon internal restructuring on Jun 19, noted the construction and property development company.

NTT’s Reit, which is to be named NTT DC REIT, will have a portfolio comprising six data centre assets valued at about US$1.6b. The last S-REIT to list at this size was Mapletree Greater China Commercial Trust, in 2013 whose IPO raised US$1.3 billion.

According to a Reuters report based on the term sheet, the REIT is hoping to raise about US$864m if an overallotment option is included. This comprises a base offering of between US$772m and US$812m, whilst the overallotment option would add another US$51.5m.

Reuters also said the term sheet showed that the REIT would have a market cap of US$1.08b.

Software services provider Info-Tech Systems launched its mainboard initial public offering (IPO) of 24,856,000 shares at S$0.87 each. The company registered its prospectus on Friday last week and its shares are expected to begin trading on Jul 4.

Info-Tech Systems is the first pure-play software-as-a-service (SaaS) provider for human resource management system (HRMS) and accounting software to list on SGX. Its listing will mark SGX’s first mainboard offering in almost two years, following the debut of livestreaming platform 17Live Group in November 2023.

OCBC made conditional offer of S$30.15 per GE share to delist GE

OCBC made a S$900 million conditional exit offer at S$30.15 per share for the 6.28% stake in Great Eastern it does not own, in a bid to delist the insurer.

The offer, which OCBC said was made “at the request of Great Eastern”, will resolve the latter’s 11-month suspension in share trading, while “providing its shareholders an exit at a fair and reasonable price”.

Independent financial adviser (IFA) to the deal Ernst and Young said this offer is fair and reasonable.

The new offer implies a price to embedded value ratio (P/EV) of 0.8 times; a price to net asset value ratio (P/NAV) of 1.6 times; and a price to earnings (P/E) ratio of 14.3 times of the insurer’s 2024 results.

OCBC’s new exit offer is conditional upon at least 75% of the total number of issued shares held by Great Eastern shareholders vote in favour of a delisting resolution, which the insurer will table at an extraordinary general meeting which is scheduled to be held on 8 July.

Offer for 10% of Cordlife deemed “unfair and unreasonable’’, eventually falls short

The independent financial adviser (IFA) assessing the offer to acquire a stake in cord blood bank Cordlife Group concluded that the offer is unfair and unreasonable, and recommended that shareholders reject it. As it turned out, shareholders heeded this advice and the offer eventually fell far short.

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.

As at the close of the offer at 5.30 pm on 25 June, the total number of shares owned, controlled or agreed to be acquired by Medeze Treasury amounted to 2.4 million, representing only a 0.95% stake.

Singtel’s Optus reached settlement over alleged sales misconduct, including A$100 million proposed penalty

Optus reached a settlement with the Australian Competition and Consumer Commission (ACCC) concerning past instances of unconscionable conduct and inappropriate sales practices between Aug 2019 and Jul 2023.

The settlement includes a proposed civil penalty of A$100m along with an Enforceable Undertaking requiring comprehensive reforms to the company’s retail and sales operation.

Maybank reiterated its “buy’’ on Singtel with a 12-month target price of S$4.30, saying there will be limited financial impact with existing provisions.

“From a financial perspective, the A$100m penalty poses minimal risk to Singtel as management has already provisioned for this amount in its FY25 financial accounts, eliminating any surprise earnings impact’’.

Singapore’s market cap to double by 2030: Morgan Stanley

Morgan Stanley in June predicted that Singapore’s stock market capitalisation will double by 2030. Singapore’s equity market – long seen by global investors as “small, safe and boring” – is on the cusp of a transformation, said Morgan Stanley.

With a limited supply of new economy listings and low trading liquidity, the market has often been overlooked, despite its solid fundamentals and stable institutional base.

But this perception could be about to shift dramatically, said the bank. In 2025, Singapore channelled billions in national reserves and third-party funds into the domestic market, and explored a “value-up” programme modelled after successful initiatives in Japan and South Korea.

“We believe this could ignite significant interest and confidence in the Singapore stock market globally and potentially underpin a multiyear re-rating in valuation multiples,” it added.

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