STI’s recovery continued, index up 1.02%

Date: June 9, 2025

• The STI rose 1.02%, its seventh weekly gain from the past eight weeks
• Wall St wobbled mid-week, Tesla’s shares crash after Musk feuds with Trump
• Some positive news on the US-China tariff front
• May US jobs data shows no tariff impact yet, Fed expected to keep rates unchanged next week
• OCBC made conditional GE offer at S$30.15 per share for remaining 6.28% stake; IFA said it’s “fair and reasonable’’
• Share buybacks on the rise in 2025: SGX Research
• Singapore Paincare shareholders should wait for IFA report: SIAS
• City Developments to reap S$465m gain on selling stake in South Beach

 

The STI rose for the seventh week out of eight

Supported by a firm Wall Street, the Straits Times Index rose 40 points or 1.02% to 3,934.29, boosted by gains in the banks, Singapore Airlines, Jardine stocks and the Singapore Exchange.

It was the index’s seventh weekly gain out of the past eight weeks since markets plunged after the US announced punishing tariffs on countries around the world. Since then, tariff concessions and an absence of further negative developments have prompted an almost total recovery.

Daily average volume however, dipped to around S$1.23b versus S$1.5b towards the end of May.

Some positive news on the US-China tariff front

After tensions between the U.S. and China escalated following Trump’s accusation that China had violated a temporary trade truce, the presidents of the world’s two largest economies held a phone call on Thursday.

Trump said it was a “very good phone call” and that Xi Jinping had invited him to visit China, an offer that he reciprocated. Trump on Friday said members of his administration would meet Chinese officials for another round of trade talks in London on June 9.

For the week, the S&P 500 advanced +1.5%, while the tech-heavy Nasdaq Composite climbed +2.2%. The blue-chip Dow added +1.2%.

Trump-Musk feud gripped Wall St, Tesla’s shares plunged 14% on Thursday

On Thursday, President Trump responded to  billionaire Elon Musk’s earlier criticisms of Trump’s tax bill by saying he was disappointed in Musk.

On X, Musk then began to resurface posts Trump made during the Obama administration, when the now-president railed against politicians increasing the national debt.

Tesla shares fell throughout the day as Musk’s jabs escalated. Musk claimed Trump would not have won the election if not for his support.

“Dems would control the House and the Republicans would be 51-49 in the Senate,” Musk replied on X to a clip of Trump. “Such ingratitude.”

Trump said on Truth Social that he asked Musk to leave the White House because he was “wearing thin.” He also suggested cutting government subsidies to Musk’s companies would save “Billions and Billions of Dollars … I was always surprised that Biden didn’t do it!”

Tesla’s shares lost US$47.35 or 14.3% at US$284.70, losing US$152.4 billion in market cap, its largest one-day decline in market cap on record, according to Dow Jones Market Data.

May US jobs data shows no tariff impact yet

The US added 139,000 positions last month, a solid pace of job growth, which will lead the Federal Reserve to keep interest rates on pause this month, and likely even in July.

Policymakers have held off on rate changes as they wait to determine the wider economic effects of President Donald Trump’s trade, immigration, and fiscal policy changes.

“Given the backdrop of trade policy uncertainties, the Fed will be relieved with this report,” writes Olu Sonola, head of U.S. economic research at Fitch Ratings. He believes the stability within the labor market will give Fed officials some flexibility to maintain their “cautious stance” for the summer, perhaps even keeping rates on pause through September and October.

As of Friday, the federal funds futures market was pricing in a 97% chance the Fed will keep rates unchanged at its 18 June meeting and an 83% probability that rates will be unchanged after the July meeting.

OCBC made conditional GE offer at S$30.15 per share for remaining 6.28% stake; IFA said it’s “fair and reasonable’’

OCBC has 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.

If the delisting resolution is passed, Great Eastern will be delisted from the Singapore Exchange (SGX) and shareholders who accept the exit offer will be paid, while those who do not accept the offer will remain as shareholders owning shares in the unlisted insurer.

But if the delisting resolution is not passed, the exit offer will lapse and Great Eastern will propose a resolution to satisfy the free float requirement.

This includes a one-for-one bonus issue resolution comprising new ordinary shares – which will be listed and carry voting rights – and newly-created Class C non-voting shares – which will not be listed and have no voting rights.

These shares will be issued at no consideration from shareholders, and will be entitled to the same dividends. All shareholders will receive the bonus shares unless they elect to receive the class C non-voting shares.

Share buybacks on the rise in 2025: SGX Research

In a 2 June Market Update, SGX Research reported that in the first five months of 2025, 63 primary-listed companies bought back shares via open market acquisitions with a combined consideration of S$930 million, up 84% from S$505 million in the first five months of 2024.

“May saw S$176 million in primary-listed company buybacks on the open market, with the consideration tally led by UOB (S$144 million @ S$35.329 average price), DBS (S$18 million @ S$44.070 average) and Olam Group (S$6 million @ S$0.926 average). UOB has bought back S$253 million of its shares over the past 5 months’’ reported SGX Research.

“Secondary-listed Hongkong Land has also bought back US$55 million of its shares at an average price of US$5.05 under the US$200 million programme announced on April 24 to run through until Dec 31. The managers of ESR REIT and Stoneweg European REIT have also continued to buy back units’’.

Singapore Paincare shareholders should wait for IFA report: SIAS

The Securities Investors Association (Singapore) or SIAS last week advised minority shareholders of Singapore Paincare Holdings to wait for the report of the independent financial adviser (IFA) that has been appointed to evaluate the privatization offer of S$0.16 per share made for the company.

Shareholders who do sell on the open market will not have recourse if the privatisation offer price is subsequently revised upwards, SIAS pointed out.

It also reminded shareholders that “for a delisting to take place, the IFA has to conclude that the offer is both fair and reasonable” and that the deal is conducted through a scheme of arrangement, which means the approval of the scheme has to be approved by more than 50% of those present and voting at the scheme meeting, and by more than 75% in value of the shares held by shareholders voting.

City Developments to reap S$465m gain on selling stake in South Beach

City Developments Ltd (CDL) has agreed to sell its 50.1% stake in the South Beach mixed project to its Malaysian partner, IOI Properties Group (IOIPG), for about S$834.2 million.

The deal values the complex at about S$2.75 billion, which represents a premium of about 3% over the most recent valuation of S$2.67 billion as at Dec 31, 2024.

CDL expects to see a gain on disposal of about S$465 million for the financial year ending Dec 31, 2025.

Assuming that the deal had been completed at the end of FY2024, the group’s net gearing ratio would have fallen from 117% to 103%. It would have logged earnings of S$638.5 million, up from S$190.8 million, had the deal been completed at the beginning of FY2024. Earnings per share would have risen to S$0.712, from S$0.213.

CDL’s shares surged S$0.41 or 8.5% over the week to finish at S$5.25.