The STI gained 0.5% as markets positioned themselves for a Sep US rate cut

Date: August 25, 2025

• The STI rose ahead of Friday’s Fed symposium at Jackson Hole
• Fed chief Powell hinted that a Sep rate cut is possible
• Latest Fed minutes show disagreement within the ranks
• iFast’s shares take a hit after Temasek-linked shareholder sells part of its stake, down 13.6% for the week
• Sats reported 9.1% rise in Q1 net profit to S$70.9m
• Great Eastern resumed trading after year-long suspension
• FTSE ST Mid & Small Cap Index’s total return in 3Q so far is 9%: SGX Research
• Singapore’s NODX down 4.6% in July as US tariffs start to bite

Buying in anticipation of positive interest rate news

The Straits Times Index rose 23 points or 0.5% last week to 4,253.02 as markets positioned themselves for positive news on the US interest rate front. As it turned out this was forthcoming – Federal Reserve chief Jerome Powell hinted at a possible rate cut in September, sparking off a large Friday rally on Wall Street.

Anticipation ahead of Powell’s speech was high, with market participants hoping for comments on easing monetary policy. Though Powell did not fully commit to cutting interest rates, he noted that the downside risks to the labour market were increasing and that the “baseline outlook and the shifting balance of risks may warrant “adjusting our policy stance’’.

Powell’s remarks also solidified expectations that the Fed will cut interest rates by a quarter-point when the central bank’s policymaking arm meets Sept. 16-17.

As of Friday, the federal funds futures market was pricing in a 75% chance of a rate cut in three weeks’ time.

For the week, the S&P 500 added 0.3%, while the Dow Jones Industrial Average gained 1.5%. The Nasdaq Composite slipped 0.6%.

Latest Fed minutes show disagreement within the ranks

Minutes from the central bank’s July 29-30 meeting, released Wednesday, show a committee wrestling with conflicting economic signals and struggling to reach consensus on everything from tariff impacts to the health of the labour market. They also reveal a growing schism over whether the Fed is falling behind the curve on rate cuts.

Those divisions help explain the first dual dissent from sitting Fed governors in more than three decades: Governors Michelle Bowman and Christopher Waller voted to cut rates by a quarter point, instead of keeping them steady in the 4.25%-4.5% range, as policymakers chose to do.

The 9-2 vote marked the first time since 1993 that multiple governors broke with the majority.

In the minutes, officials expressed numerous conflicting opinions on the inflationary impacts of tariffs. Some policymakers said they needed more time to assess how trade policies might affect prices, while others pushed back that waiting for that clarity wouldn’t be “feasible or appropriate.”

The disagreements come amid sustained pressure from President Donald Trump, who has called for substantial rate cuts while criticizing Powell’s leadership.

Powell, who Trump appointed chair during his first presidential term, has said he is waiting to see the impact of tariffs on inflation, meanwhile, and plans to complete his term as chair, which expires in May 2026. Both Bowman and Waller are Trump appointees—and are seen as potential successors.

iFast’s shares take a hit after Temasek-linked shareholder sells part of its stake

Shares of global digital banking and wealth management platform iFast took a beating last week following news that substantial shareholder CP Invest, which is a subsidiary of Temasek-owned Cuscaden Peak, sold about 14.4m shares at S$9.12 on Tuesday, a 6.7% discount to Monday’s closing price of S$9.77.

As a result, IFast’s shares crashed, closing down S$0.83 or 8.5% at S$8.94 on volume of 23.2m on Tuesday, followed by more weakness on Wed and Thursday before a slight recovery on Friday. The ended the week at S$8.45, a nett loss of S$1.33 or 13.6% for the week.

In an announcement, iFast said the sale was arranged by Morgan Stanley and UBS and that CP Invest’s stake would fall from 9.6 to 4.9%, which meant that CP Invest would no longer be a substantial shareholder.

The Business Times quoted CGS International analyst Tay Wee Kuang saying that investors are likely to see this as a sign that iFast is “fairly valued at S$9.77.

“CP Invest still has 15 million shares, which some investors may view as an overhang to the share price as they could sell it at a lower price going forward if they want to monetize their stake quickly’’ he said.

Tuesday’s sell-off came a day after iFast Pay Malaysia, a Malaysia-incorporated subsidiary of iFast, received in-principle approval from Bank Negara Malaysia to operate as an electronic money issuer and hold a Money Services Business Class A licence.

Both DBS and CGS International had reiterated calls to “buy” and “add” on Jul 29, with target prices of S$10 and S$9.20, respectively, after iFast’s Q2 results.

Sats reported 9.1% rise in Q1 net profit to S$70.9m

Airline ground handling agent and caterer  SATS reported a 9.1% rise in net profit for its first quarter ended 30 June to S$70.9 million boosted by growth in aviation cargo and food service volumes.

Revenue for the quarter was up 9.9% at S$1.5 billion. Of this, S$1.18 billion came from gateway services, 11.2% higher than in the year-ago period, due to a larger customer portfolio. Significant customer wins included carriers Cathay Cargo, Cathay Pacific, Emirates SkyCargo, Riyadh Air and Turkish Airlines.

Looking ahead, SATS  expects gateway services revenue to remain resilient, supported by its business mix and global network.

The company also expects its food solutions unit to continue benefiting from growing demand for high-quality aviation meals in the region.

SATS’ shares rose S$0.08 to S$3.26 on Thursday after the release of the results and were unchanged on Friday. However, they lost a nett S$0.01 for the week.

Great Eastern resumed trading after year-long suspension

Great Eastern Holdings (GEH) resumed trading on Thursday after a proposed bonus share issue lifted its free float above 10%.

It was suspended in July 2024 after its free float fell below 10%, following a failed takeover bid by parent company OCBC. As a result of the one-for-one bonus issue, shareholders who, for example, previously held 1,000 shares will now own 2,000 shares.

GEH shares resumed trading on Thursday morning at S$13.21 and closed at S$13.50. A simple calculation shows that shareholders are better off  with two shares worth S$27 compared to the last traded price of S$25.80, prior to the suspension and bonus issue.

But compared to OCBC’s S$900 million conditional exit offer of S$30.15 a share, they are worse off by S$3.50 or about 10%.

The insurer failed to pass a delisting vote at its extraordinary general meeting last month, which led to the passing of a resolution for a one-for-one bonus issue. It comprised new ordinary shares and newly created Class-C non-voting shares, and shareholders could choose which to receive.

FTSE ST Mid & Small Cap Index’s total return in 3Q so far is 9%: SGX Research

In a 12 Aug Market Update, SGX Research said the FTSE ST Mid & Small Cap Index, which is a subset of the FTSE ST Index Series, comprises 74 constituents with a combined market capitalisation of S$176 billion and generated a 9% total return in 3Q25 to Aug 12, following a comparatively narrow 1.8% total return in 1H25.

“The Index maintains a P/E ratio of 16x and P/B ratio of 1.0x’’ said SGX Research. “For 3Q25 to Aug 12, the FTSE ST Mid & Small Cap Index has seen 11 stocks constituents gain for every one that declined. PropNex led the Index with a 52% gain in the period, which saw its share price rise from S$1.08 to S$1.64’’.

Singapore’s NODX down 4.6% in July as US tariffs start to bite

Singapore’s non-oil domestic exports (NODX) shrank 4.6% year on year in July, in a sharp contrast from the revised 12.9% jump recorded in June. The decline was also deeper than the 1% contraction that private-sector economists polled by Bloomberg were expecting.

“While the NODX underperformance was partly due to the high base in July last year, particularly for pharmaceuticals, nevertheless, the tariff headwinds are mounting,” said OCBC chief economist Selena Ling in a Business Times report.

In particular, exports to the United States, one of Singapore’s key markets, contracted by 42.7% year on year, an acute worsening from the 4.8% decrease in June. This was attributed to lower shipments in typically volatile pharmaceuticals, specialised machinery and food preparation.

Overall, NODX to six of Singapore’s top 10 markets contracted. These were – in addition to the US – China, Indonesia, Thailand, Malaysia and Japan.