The banks, with OCBC at a new all-time high, pushed the STI up 1.2% after Fed rate cut

Date: December 15, 2025

• The STI rose 1.2% to 4,586.45 supported by bank gains, OCBC at all-time high
• US Fed delivered the expected rate cut and added an upbeat statement on the economy
• Dow & S&P 500 hit new highs on Thursday but persistent AI concerns hit tech sector
• YZJ Maritime, CAREIT and Golden Agri to join iEdge Next 50 index
• Noodle maker Leong Guan debuted on Catalist
• Asia is still under-invested despite attractive valuations: DBS

 

As expected, the US Fed cut rates on Wednesday

The US Federal Reserve delivered a widely-expected 25-basis points interest rate cut on Wednesday as well as a fairly benign assessment of the US economy thus sending the Dow Jones Industrial Average and S&P 500 to record highs on Thursday.

As a result, the Straits Times Index was lifted by about 66 points on Friday, bringing its nett gain for the week to around 55 points or 1.2% at 4,586.45.

Not surprisingly, it was the three banks which contributed the most to the index’s rise, most notably OCBC whose S$0.28 or 1.5% jump over the week took it to a new all-time high of S$19.20.

DBS in the meantime added S$0.88 or 1.6% at S$55.04 whilst UOB rose S$0.20 or 0.6% to S$34.72.

US Fed delivered the expected rate cut

The Fed lowered its benchmark borrowing rate for a third consecutive meeting, taking it to between 3.5% and 3.75% and forecast a further quarter-point reduction in 2026.

However, this was countered by bullish expectations for economic growth and a largely unchanged outlook on the unemployment rate that sent stocks surging.

Powell told reporters that risks to the central bank’s dual mandate for full employment and steady prices were largely balanced but noted that delayed data from the 43-day U.S. government shutdown still will need to be assessed.

He did, however, push back on the idea that this could trigger a near-term rate hike, saying such a move “isn’t anybody’s base case at this point’’.

The dovish tone to an otherwise hawkish rate cut which included uncommon division among Fed officials and suggested further uncertainty when Powell’s term ends in the spring, gave stocks a powerful boost.

Dow & S&P 500 hit new highs but persistent AI concerns hit tech sector

Thanks to the latest rate cut and Fed statements, the Dow Jones Industrial Average and S&P 500 closed at new all-time highs on Thursday. However, stocks came under pressure on Friday and for the week, the S&P 500 slipped 0.6%, while the tech-heavy Nasdaq Composite retreated 1.6%. The blue-chip Dow advanced 1.1%.

Oracle, which has become increasingly representative of investor concerns over the pace of artificial-intelligence spending and the time it takes to convert that into profit and revenue gains, disappointed markets with a mixed set of 2Q earnings on Wednesday.

The tech and cloud giant also rattled the market’s nerves with a 40% quarter-on-quarter increase in capital spending, which was pegged at around US$12 billion, while forecasting a fiscal-year tally of US$50 billion, some US$15 billion more than Wall Street had expected.

Perhaps more importantly, co-CEO Clay Magouyrk wouldn’t put a figure on the amount of money Oracle would need to borrow to fund its AI ambitions when directly asked by Deutsche Bank analyst Brad Zelnick.

“We’ve read quite a few that show an expectation of upwards of a US$100 billion,” Magouyrk said. “We expect we will need less, if not substantially less, than that amount’’.

“The AI trade is in a funk,” Deepwater Asset Management’s Gene Munster told CNBC late Wednesday. “And the question I’m asking is what’s the timing as to when we’re going to get out of that.”

YZJ Maritime, CAREIT and Golden Agri to join iEdge Next 50 index

Yangzijiang Maritime, Centurion Accomodation REIT, and Golden Agri-Resources will join the iEdge Singapore Next 50 Index on Dec 22, adding that based on indicative weights as of Nov 28, the trio, which includes two recent debutants, could enter among the Index’s top 15 constituents.

“Samudera Shipping Line, Nanofilm Tech, and Aztech Global, which currently maintain a combined 1% weightage, will move to the Next 50 Index Reserve list, joined by Marco Polo Marine, Q&M Dental Group, Delfi, LHN, OKP Holdings, Nam Cheong, and Oiltek International’’ said SGX Research.

“Stocks of the iEdge Next 50 Index that have seen the greatest increase in trading activity in 2H25 over 1H25 include PropNex, China Sunsine Chemical, Banyan Tree, China Aviation Oil and CSE Global. The five stocks averaged 59% total returns in 2H25, while averaging 4.6x growth in 2H25 average daily turnover from 1H25’’.

The iEdge Singapore Next 50 Index comprises 50 of the largest capitalised and most actively traded Mainboard-listed stocks excluding Straits Times Index (STI) constituents.

Noodle maker Leong Guan debuted on Catalist

Shares of food manufacturing and distribution company Leong Guan debuted on Catalist last Thursday and closed at S$0.24 on volume of 4.98m versus the S$0.23 offer price.

Leong Guan on Wednesday said that its placement of about 20.7 million shares had raised S$4.75m with net proceeds amounting to S$2.15m of which S$300,000 will be for the expansion of its export markets and product range, S$700,000 for improving manufacturing facilities, S$600,000 for acquisitions, joint ventures and strategic alliances for business expansion, and S$549,000 for general working capital.

The group intends to distribute a minimum of 80 per cent of the 2025 financial year net profit, and at least 35 per cent of the 2026 net profit as dividends to shareholders.

Asia is still under-invested despite attractive valuations: DBS

Asia remains “under-invested” despite the region’s strong performance and comparatively attractive valuations, said Daryl Ho, senior investment strategist at DBS’ chief investment office.

Ho attributed this to lingering caution among investors, as Asian markets “had not been doing so well” in the last few years.

Yet, Asia is “painting a rather sanguine picture” lately in terms of market opportunities, he argued in a private-wealth segment at the bank’s Market Outlook 2026: Empowering Businesses for Global Shifts forum on Dec 4.

First, dividend-paying investments in Asia continue to offer solid income.

Ho highlighted dividend yields in Singapore and China in particular, noting that payouts in both markets are around the 5 to 6 per cent range.

In Singapore, yields of around 6 per cent are still common for banking stocks and real estate investment trusts, and are supported by a strong currency.

He pointed out that US technology stocks trade at about 36 times earnings. In Asia – excluding Japan – similar stocks trade at less than 20 times earnings, despite what Ho described as “rather decent growth”.

Many well-known US technology stocks have comparable counterparts in China that trade at a “better valuation”, he added. For example, Amazon’s counterpart is Alibaba, Google’s is Baidu and Tesla’s is BYD – and the “gulf in valuations is extremely stark” despite the similarities in their business models.

He cited how Tesla has been trading at a price-to-earnings ratio of about 277.5 times, compared with 20.8 times for BYD.

Amazon’s ratio stood at 33.8 times versus Alibaba’s 26.9 times, while Google traded at 28.6 times compared with 17.8 times for Baidu.