Strong rebounds in three banks helped STI shrug off Wall St’s wobbles

Date: April 21, 2025

• 7% rebounds in the banks propels the STI up 6% to 3,720.33
• Wall St’s indices all closed weaker on tariff and earnings concerns
• US inflation still a problem, no rush to cut rates: Fed chief Powell
• Great Eastern working to comply with SGX’s free float requirement
• Q&M Dental seeking secondary listing in Malaysia, demands 72.3m yuan from Aoxin Q&M CEO
• S’pore’s growth downgraded, technical recession possible
• Global growth will slow because of tariffs, no recession expected: IMF

 

Strong rebounds in the banks pushed the STI up almost 6%

Despite being downgraded by analysts following US tariff concerns, it was the three banks that last week helped the Straits Times Index jump 208 points or almost 6% to 3,720.33 despite Wall Street wobbling under the weight of tariff uncertainty and weak earnings.

UOB led the way with a S$2.33 or 7.2% bounce to S$34.80 over the holiday-shortened week. DBS followed narrowly behind with a S$2.70 or 7.1% jump to S$40.83 whilst OCBC weighed in with a S$0.97 or 6.5% rise to S$15.98.

How Wall St fared – all major indices fell for the week

US stocks last week continued to trade uncertainly because of tariff-related worries. The benchmark S&P 500 index has now notched seven negative weeks out of nine, as tariff developments continue to sour sentiment. After several – sometimes confusing – adjustments and clarifications to tariff policy last week, things were quieter on that front, although stocks mostly traded to the downside.

The US and China’s trade war continued to heat up after chipmakers Nvidia and AMD disclosed anticipated charges due to US export controls on some of their products to China. The updates, along with a weak quarterly bookings performance by Dutch chip giant ASML led to a tech rout and contributed to the majority of the week’s overall market losses.

However, Friday’s steep 527 points loss suffered by the Dow Jones Industrial Average to 39,142 came because of a 22% crash in UnitedHealth, following a weak earnings report and a disappointing outlook. UnitedHealth has a 9% weighting in the Dow.

For the week, the Dow Jones Industrial Average was down 2.7%, the S&P 500 lost 1.5% and the Nasdaq Composite fell 2.6%.

US inflation still a problem, no rush to cut rates: Fed chief Powell

Speaking at the Economic Club of Chicago, US Federal Reserve chairman Jerome Powell acknowledged that recent tariff-induced volatility has tightened financial conditions. But he rejected the idea that falling equity prices and rising bond yields alone would prompt a policy response.

Powell said Fed officials need to have “greater confidence” that inflation is moving toward the central bank’s 2% annual target before further cutting rates, and that because of the Trump administration’s tariffs, achieving such confidence is likely to take longer than previously expected.

“Tariffs increase costs,” he said. “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects’’.

As Fed officials attempt to navigate these changes, he said, there is a growing risk of stagflation, or sluggish growth coupled with inflation. Fed officials could find themselves in a “challenging scenario” where their dual goals of promoting maximum employment and stable prices “are in tension,” he said.

Deutsche Bank analysts said in a note that, despite the bleak picture, Powell does not appear to be in a rush to react to economic challenges.

“His comments added to the sense that the Fed wouldn’t be in a rush to react to the weaker surveys of recent weeks,” the analysts said. “Moreover, he downplayed the need for any Fed market intervention, noting that markets remained orderly even if they were ‘struggling with a lot of uncertainty’”.

Great Eastern working to comply with SGX’s free float requirement

Great Eastern is working with its financial adviser to explore options for complying with the Singapore Exchange’s (SGX) free-float requirements.

Speaking at the annual general meeting (AGM) of OCBC’s insurance arm on Monday, GE’s chairman Soon Tit Koon acknowledged that the board recognises that the current trading suspension is “not a satisfactory situation”.

He added that GEH will engage with parent company OCBC to identify alternative solutions that it may not be able to pursue independently.

Last May, OCBC made a voluntary unconditional general offer of S$1.4 billion for the remaining 11.56% stake in Great Eastern that it did not already own, with the aim to delist the insurer.

The bank held nearly 94% of the insurer when the takeover offer closed in July 2024, but this was not enough for Great Eastern to delist, or for OCBC to compulsorily acquire the rest of its shares. However, it was suspended because it breached the SGX’s 90% free float rule.

OCBC was allowed to make a revised offer six months after the close of the previous offer, under Singapore’s takeover code.

In January 2025, the insurer made an application to SGX for a further extension of time to examine its options for complying with the free-float requirement. SGX had no objection to granting the extension and Great Eastern has until May 25 to explore options.

Q&M Dental seeking secondary listing in Malaysia, demands 72.3m yuan from Aoxin Q&M CEO

Mainboard-listed Q&M Dental is proposing a secondary listing on the main market of Bursa Malaysia, saying this would broaden its investor reach and base, as well as potentially increase the liquidity of its shares through separate trading platforms.

In a separate announcement the group said it has issued a letter of demand to Dr Shao Yongxin, executive director and group chief executive officer of  Catalist-listed Aoxin Q&M for about 72.3 million yuan (S$13 million). Q&M directly holds 32.8% of Aoxin’s shares as at Apr 17.

Citing a circular from October 2016, the group said Dr Shao “had provided certain profit guarantees” in relation to an acquisition made by its subsidiary. Shanghai Q&M Investment Management & Consulting had acquired Shenyang Xinao Hospital Management from Dr Shao.

The group said Dr Shao owes it 72,274,588 yuan as at Dec 31, 2024, arising from shortfalls in the profit guarantee.

“Despite numerous reminders and follow-ups with Dr Shao, the shortfall amount remains outstanding,” Q&M said.

The company is also in the process of obtaining legal advice. It will “consider all available options” to recover the owed funds, it said.

S’pore’s growth downgraded, technical recession possible

Singapore downgraded its official growth forecast to “0 to 2%”, from a range of 1 to 3%, as its external demand outlook has “weakened significantly” due to US President Donald Trump’s tariff regime.

“Although there has been a temporary 90-day pause in the implementation of the higher reciprocal tariffs, except for China, the tariff war between the US and China has intensified, with an escalating cycle of tit-for-tat tariffs being imposed by both sides,” said the Ministry of Trade and Industry (MTI) on Monday.

OCBC chief economist Selena Ling was quoted by The Business Times saying: “A technical recession is possible as the brunt of the initial US tariff announcements has wreaked significant havoc on financial markets in April and real economic fallout is anticipated in the coming months’’.

Assuming that the trade war sees no near-term improvements, Singapore’s economy could contract again sequentially in the second quarter, said Ling, after it shrank 0.8 per cent in the first quarter, based on advance estimates released on Monday. This would bring the economy into a technical recession.

Citi economist Kit Wei Zheng downgraded his full-year forecast as well to 1.4% for 2025, and 1.2% for 2026, from 2% for each year previously. This assumes a “mild three-quarter technical recession”, with a 0.3% quarter-on-quarter contraction on average between the third quarter of this year and Q1 of 2026.

Standard Chartered economists Edward Lee and Jonathan Koh also lowered their growth forecast for 2025 to 1% from 2.5% previously, and that for 2026 to 1.9% from 2.3% earlier.

US tariffs will hurt global growth but no recession expected: IMF

The global economy is likely to avoid a recession, despite the hit to growth from US President Donald Trump’s tariff rollout, the head of the International Monetary Fund (IMF) said.

The stop-start US tariff plans have fuelled levels of market volatility unseen since the Covid-19 pandemic, and most economists expect the imposition of new import levies will stifle growth and push up inflation, at least in the short term.

Trade disruptions “incur costs,” IMF Managing Director Kristalina Georgieva told reporters in Washington on Thursday according to prepared remarks, adding that the Fund now expects “notable” markdowns to growth but no recession.

Georgieva said the current tariff tensions would likely have three major consequences for the global economy, with smaller advanced economies and most emerging markets likely to be more heavily affected due to their reliance on trade for growth.

“First, uncertainty is costly,” she said, adding that it becomes difficult for business to make plans if they do not know how much their inputs will cost in the future.

“Second, rising trade barriers hit growth upfront,” she said, adding that “tariffs, like all taxes, raise revenue at the expense of reducing and shifting activity.”

“Third observation: protectionism erodes productivity over the long run, especially in smaller economies,” she said.

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