In today’s briefing:
- Singapore Equity Strategy: July 2025
- Japan Morning Connection: AMD and NVDA Set to Pay 15% of China Chip Sales to US for Export Licenses
- HSBC – 1H25 Tables & Data, Clear Risks, Even if Not Stated in Headlines
- Japanese Big Retailers: Winners and Losers
Singapore Equity Strategy: July 2025
- From the macro perspective, we have been in favour of Retail REITS – high domestic liquidity supported by income, savings and government fiscal giveaway – while shying away from Industrial REITS on external uncertainty.
- External headwinds relating to US tariffs remain, but some clarity has started to emerge. Most of Singapore’s trading partners will be subject to a tariff rate of 15-20%, below the reciprocal rates announced on 2 April. Singapore will continue to be charged the baseline rate of 10%.
- Also, favourable domestic drivers are gathering momentum, which will bode well for Industrial REITS. Funding cost has fallen further to the lowest in three years. On monetary policy, the Monetary Authority of Singapore (MAS) stood pat in policy as announced in the 30 July policy statement, thus keeping SGD at only a slight appreciation path. Meanwhile, both the rental and vacancy rates for industrial properties have been steady though off the best.
Japan Morning Connection: AMD and NVDA Set to Pay 15% of China Chip Sales to US for Export Licenses
- Intel CEO Tan summoned to Washington for meetings will likely result in a bigger domestic fab push.
- Micron beats on HBM, Kioxia on NAND – sets a good tone for memory overall.
- NVDA selling Blackwell in China positive for substrate supplier Ibiden.
HSBC – 1H25 Tables & Data, Clear Risks, Even if Not Stated in Headlines
- We believe that the credit metric deterioration at HSBC is not well flagged by the bank, or well understood in the market.
- There is substantial growth in credit costs in its HK business, where this has been the most important driver of value for HSBC
- CRE credit metrics are of concern in HK and in Mainland China, where Stage 2 loans are rising substantially, from Stage 1 loan bucket
Japanese Big Retailers: Winners and Losers
- FMCG retailers remained dominant and market concentration increased, with top firms expanding through consolidation.
- Discounters, drugstores and e-commerce outperformed the market overall, while general merchandise stores and apparel/lifestyle declined.
- Profitability varied significantly, but discounters stood out as consumers flocked to their stores to escape inflation where they could.
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