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Market View Update
Navigating fluid tariff developments over the next three weeks
DBS tariff bull-bear-base scenarios
| Bull | Base | Bear |
Probability
| 25% | 55% | 20% |
|
|
|
Source: DBS
Announced tariff rates on 7 July 2025
Countries | Liberation Day | Revised rates | Change / Delta |
Bangladesh | 37 | 35 | -2 |
Bosnia / Herzegovina | 35 | 30 | -5 |
Cambodia | 49 | 36 | -13 |
Indonesia | 32 | 32 | unchanged |
Japan | 24 | 25 | 1 |
Kazakhstan | 27 | 25 | -2 |
Laos | 48 | 40 | -8 |
Malaysia | 24 | 25 | 1 |
Myanmar | 44 | 40 | -4 |
Serbia | 37 | 35 | -2 |
South Africa | 30 | 30 | unchanged |
South Korea | 25 | 25 | unchanged |
Thailand | 36 | 36 | unchanged |
Tunisia | 28 | 25 | -3 |
Source: DBS, News sources
- What’s new: The US announced revised tariff rates for 14 countries starting 1 August
- Negative #1: Little or no change to tariffs rates versus the 2-April ‘Liberation Day’ levels
- Negative #2: Trump also warns of additional 10% tariffs on any country that aligns with BRICS (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and United Arab Emirates)
- Positive #1: The US is open to further negotiations that may or may not lead to a further extension beyond the new 1 August deadline
- Observation: Latest tariff developments appear to lean more towards our base-bear than base-bull scenario, though the tariffs environment remains fluid over the next 3 weeks of negotiations
- Nikkei and KOSPI are currently trading modestly firmer as focus is on further negotiation outcomes rather than the headline tariff numbers
- Our view: Maintain our STI view for the 2Q recovery to turn sideways in 3Q, with renewed tariff uncertainty now pushed back into August, where the US-China 90-day truce also ends
- Resistance levels seen at 4040 and 4080, support at 3930 and 3808
- We reiterate our call to stick to stocks with domestic resilience
- (1) Stocks with value unlocking potential: UOL, CityDev
- (2) Resilient high-yield stocks: NetLink, DFI Retail, ComfortDelGro
- (3) Potential EQDP beneficiaries: IFAST, SIA Eng, UMS, Frencken, Sheng Siong
- We are keeping a close watch on stocks that are more sensitive to trade/tariff newsflows, e.g., SATS, SIA, Venture, HPH Trust, and MLT
Stocks to Watch
IOI Properties Group (non-rated)
- Proposed crystallisation of investment properties in Malaysia and Singapore to unlock significant value and reduce IOIPG’s gearing to 0.45x
- Malaysia REIT listing at book value could unlock MYR5.1 bn or MYR0.93 per share
- Singapore REIT listing, even at 0.8x P/NAV, could unlock up to an additional MYR11.7 bn or MYR2.13 per share
- Fair value of IOIPG on “as is” basis is MYR2.43, with potential 67% upside to MYR4.05 with REIT spinoffs
Legend
| (+) | (-) |
Earnings | Positive earnings revision | Negative earnings revision |
Recommendation | Upgrade | Downgrade |
TP | Increase | Decrease |
Singapore Equity Picks
We remove 2 stocks from equity picks with potential impact from the latest tariffs developments
HPH Trust: Remove from Dividend at USD0.174
HPHT shares gained 17.5% since its mid-May inclusion. Stock has eased off from USD0.179 since late June, which is near our fundamental TP of USD0.18. Near-term tariff uncertainty should see a continued near-term consolidation/correction of recent gains. But technically, speculation over future HPHT divestment may see the stock supported at USD0.164.
Mapletree Logistics Trust: Remove from Dividend at SGD1.17
Nobody likes to change a view within a week but sometimes we have to protect portfolio performance amid the latest tariff developments. While MLT is among our REIT picks, near-term sentiment is affected by (1) its Asia-Pacific exposure (2) sudden back paddle in Fed funds futures estimates of the number of rate cuts by year-end back to 2 vs 2.6 in end-June. We see MLT turning near-term rangebound from SGD1.11-1.13 support to SGD1.17-1.19 resistance. We turn to the sidelines as we monitor tariff developments.
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