No adverse tariff developments helped STI to third straight weekly gain

Date: May 5, 2025

• The STI managed a rise for the third consecutive week
• The rise was driven by absence of negative tariff news
• Chances of a US interest rate cut this week is only 2.8%
• Amara to be privatised at S$0.895 per share
• Q&M Dental tabled mandatory takeover offer for Aoxin Q&M
• iFast’s shares plunge after reduced HK profit guidance; analysts maintain “buy’’

 

STI gained 0.6% on the absence of adverse tariff news

For the third week running it was the absence of adverse US tariff developments more than the presence of positive developments that enabled the Straits Times Index to record a gain, this time 22 points or 0.6% at 3,845.14.

Average daily volume, however, was noticeably down to S$1.27b versus S$1.46b the week before.

US stocks continue to rally, odds of US rate cut this week down to 2.8%

Wall Street closed out a strong week on a historic note, with the benchmark S&P 500 on Friday notching a nine-day win streak—its longest such run since November 2004.

Microsoft and Facebook-parent Meta delivered blowout quarterly numbers and issued guidance that quelled economic concerns. The companies also said they remained committed to heavy spending on artificial intelligence.

On the other hand, analysts fretted over the potential impact of tariffs on Apple’s gross margins, while Amazon’s slightly conservative current quarter guidance disappointed.

For the week, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite Index gained 3%, 2.9% and 3.4% respectively.

The strong April jobs report released on Friday most likely took an interest-rate cut off the table when the Federal Open Market Committee (FOMC) meets this week.

Odds of a rate cut on May 7 dropped to 2.8% from 5.7% prior to the employment report, according to the CME FedWatch Tool.

“With the unemployment rate remaining at 4.2%, the Fed will feel comfortable with their current wait-and-hold market stance and will have less of a reason to cut at the May and June meetings while they wait for the uncertainty and volatility of data to moderate,” said Ryan Weldon, investment director and portfolio manager at IFM Investors in a report in US newspaper Barron’s.

Amara to be privatised at S$0.895 per share

Hotel group Amara last week received a voluntary conditional general offer at S$0.895 per share from a consortium led by property company Hwa Hong, which was formerly listed on the Singapore Exchange.

The offer is final and values the hotel group at about S$514.6 million. It represents a premium of 27% over Amara’s closing price of S$0.705 on Apr 23 before the company called for a trading halt the following day, and a 33% premium over Amara’s net asset value per share as at end-December 2024.

The offeror has obtained irrevocable undertakings from a group of Amara shareholders, with a combined stake of 90.58%, to vote in favour of the deal. The group includes Amethyst Assets, which, in 2023, proposed to privatise Amara.

Q&M Dental tabled mandatory takeover offer for Aoxin Q&M

Mainboard-listed Q&M Dental has made a mandatory unconditional cash offer to acquire all the shares it does not already own in its subsidiary Aoxin Q&M at S$0.0321 per share to comply with Rule 14.1 of the Singapore Code of Takeovers and Mergers.

This follows Q&M’s recent increase in its stake in Catalist-listed Aoxin Q&M from 33.33 to 50.5%. Having crossed the mandatory 50% threshold, Q&M is obliged to make the offer which will close at 5.30 pm on May 28. If fully accepted, Q&M will pay around S$8.1 million for the offer shares.

The increase in stake comes after Q&M acquired 87,973,480 shares from Health Field Enterprises Ltd (HFEL) at a volume-weighted average price of S$0.0321 per share.

The purchase was under a share security agreement dated Oct 12, 2016, which HFEL had entered into in favour of Q&M and represents a partial settlement of profit guarantee obligations owed by Dr Shao Yongxin, executive director and group CEO of Aoxin, and HFEL under a master agreement dated Nov 13, 2013.

This follows Q&M’s issuance of a letter of demand on Apr 18 to Dr Shao for 72.3 million yuan (S$13 million), arising from shortfalls in profit guarantees. Despite repeated reminders, Dr Shao and HFEL have failed to meet their obligations or propose a reasonable alternative, Q&M said.

Under the share security arrangement, Q&M was entitled to transfer the relevant number of Aoxin shares held by HFEL to an independent third party for sale. Proceeds, after deducting transaction costs, would then be used to cover the shortfall.

However, Q&M said “no suitable third-party buyers were found by the independent third-party despite using its reasonable endeavours”. As a result, the group has opted to acquire the 87,973,480 Aoxin shares from HFEL directly as partial settlement of the outstanding amount.

iFast’s shares plunge after reduced HK profit guidance; analysts maintain “buy’’

Investment platform operator iFast’s shares took a beating last week after

the Singapore-based company cut its Hong Kong profit before tax target for 2025 to HK$380 million (S$64.3 million) from its previous guidance of HK$500 million, based on its earnings report on Friday (Apr 25).

The stock over the week plunged from S$7.19 to S$6.22 on Thursday before rebounding S$0.08 on Friday to S$6.30. The net loss for the week was S$0.89 or 12.3%.

iFast had earlier reported a net profit rise of 31.2% year on year to S$19 million for the first quarter ended Mar 31, which was driven by a 24.4% year-on-year increase in revenue to S$106.9 million largely due to a turnaround in its UK bank and continued growth in the group’s core wealth management platform business.

DBS described the results as slightly below expectations. “Growth in Hong Kong was weighed down by higher investments in the ePension division, with PBT (profit before tax) declining 6.8% year on year despite a 12.8% increase in revenue. The dip in profitability is due to increased investments in the ePension division ahead of onboarding activity,” said DBS. ePension refers to its pension administration services.

“However, both the revenues and profitability of the ePension division are expected to be higher in the second half of 2025 as the overall onboarding of the eMPF platform progresses to a substantially higher level,” the bank added.

DBS has a “buy” call on iFast with a price target of S$10.88.

Meanwhile, UOB Kay Hian has a “buy” call with a target price of S$7.28.

The brokerage said that iFast’s Q1 2025 net profit had “slightly missed” expectations.

“While the Hong Kong ePension division has contributed significantly, only six out of 24 schemes under the MPF system have onboarded in ascending order of assets under management,” said the broker.

“Given the technical and operational risks associated with onboarding larger schemes and the ongoing ramp-up in staff headcount, we maintain a conservative outlook’’ said UOB-Kay Hian.

Selected earnings in brief

Frasers Centrepoint Trust (FCT) announced a 0.5% increase in distribution per unit (DPU) for the first half ended Mar 31 to S$0.06054 which will be paid on 30 May. Revenue for H1 was up 7.1% at S$184.4 million. Net property income (NPI) rose 7.3% to S$133.7 million. Distributions to unitholders for the period rose 4.9% on the year to S$110.1 mainly due to higher NPI, the full six-month contribution from the acquisition of an additional 24.5% interest in Gold Ridge, and better performance by the Waterway Point and Nex malls. Gold Ridge is the entity that owns and manages the NEX shopping mall in Serangoon Central.

Starhill Global Real Estate Investment Trust (REIT) reported NPI of S$37.9 million for Q3 FY2025 ended Mar 31, up 0.5% in the previous corresponding period driven by appreciation of the Malaysian ringgit against the Singapore dollar and lower operating expenses. Revenue for Q3 FY2025 remained flat at S$47.6 million. Gearing at the end of Mar 31 stood at 36.6 per cent. Occupancy across Starhill Global’s portfolio for the quarter dipped slightly to 97.4% as at Mar 31, from 97.7% as at Jun 30, 2024. The weighted average lease expiry stood at 7.2 years.

First REIT’s DPU fell 3.3% to S$0.0058 for the first quarter ended Mar 31, whilst rental and other income fell% to S$25.4 million. Net property and other income slipped 2.8% to S$24.6 million. The manager attributed the Q1 decline to the depreciation of the Indonesian rupiah and Japanese yen against the Singapore dollar. This was partially offset by higher rental income from properties in Indonesia and Singapore, it said. There was also an enlarged unit base – up by 0.8 per cent – from the issuance of units for payment of management fee to the manger, which brought distributable income to S$12.2 million in Q1, down 2.2%. The distribution will be paid out on Jun 26, after book closure on May 15.