DBS, UOB and OCBC slip on tariff concerns; property, construction boom propels OKP to record high

SINGAPORE - Singapore’s three listed banks fell last week as a trade war intensified between the US and its trade partners, and as concerns emerged that the next wave of US tariffs could impact South-east Asia.

UOB fell the most, sliding more than 5 per cent to close the week at $36.71. DBS Bank, Singapore’s largest bank, fell by 3.5 per cent over the week to close at $44.25, while OCBC Bank dropped 3.5 per cent to $16.48 over the period.

The banks snapped an upward share price streak that drove both DBS and UOB to all-time highs earlier in February, as

President Donald Trump’s tariff threats

on the US’ major trading partners and retaliatory moves from those affected stoked fears of a US economic downturn and spooked markets globally.

In the United States, a stock market slump on March 10 wiped out US$4 trillion (S$5.33 trillion) from the S&P 500’s peak in February, although share prices recovered at the end of the week – led by a rebound in technology giants Nvidia and Tesla.

Still, more volatility should be expected after Mr Trump ordered a series of air strikes on Houthi-held areas in Yemen over the weekend. Despite the attack having killed at least 18 civilians, he has promised to use “overwhelming lethal force” until the Iranian-backed Houthi rebels cease their attacks on commercial ships in the Red Sea.

The Houthis have targeted over 100 merchant vessels in the Red Sea with missiles and drones between late 2023 and January 2025, sinking two ships and killing four sailors, in a campaign of support for the Palestinians.

CDL’s Kwek Leng Beng drops lawsuit against son

Shares of property developer City Developments Limited (CDL) closed flat at $5.05 last week, after they initially jumped by as much as 4.7 per cent to $5.17 shortly after markets opened on March 13.

The night before, CDL executive chairman Kwek Leng Beng said he

would drop the lawsuit he had filed against his son Sherman Kwek on Feb 26,

adding that all board members had agreed to put aside their differences for the greater good of CDL and its stakeholders.

The lawsuit was to stop Mr Sherman Kwek and majority directors of CDL from implementing a number of board resolutions which Mr Kwek Leng Beng

alleged undermined his authority and were an attempted power grab. 

The Straits Times later reported that trusted family friends and senior establishment figures in Singapore

had intervened to mediate a truce between father and son.

In his March 12 statement, the senior Mr Kwek also said that he would continue in his role as executive chairman, while his son would remain as group chief executive.

Still, the corporate governance lapses and management issues, such as the group CEO’s competence in taking the company forward, remain. Analysts noted that investors will want these concerns fully resolved, and greater clarity on CDL’s plan to maximise shareholder returns given, before the stock revalues.

Property, construction boom

Shares of construction and engineering company OKP Holdings closed the week at 54 cents, its highest level in 10 years, amid a rise in construction spending in Singapore.

Some $47 billion to $53 billion in construction contracts are expected to be awarded in 2025, driven by upgrading works for public housing, construction of Changi Airport Terminal 5 and the expansion of Marina Bay Sands, according to the Building and Construction Authority (BCA) in January.

This is higher than the estimated $44.2 billion in contracts in 2024, due to an anticipated increase in the launch of major public infrastructure projects and development of public and private housing, BCA said.

About 19,600 Build-To-Order flats will be launched in 2025, while seven private housing developments have already been launched so far in 2025. These include The Orie in Toa Payoh, Parktown Residence@Tampines, Aurelle of Tampines, Elta in Clementi, Lentor Central Residences and Aurea, which is located at the former Golden Mile site in Beach Road.

Also taking advantage of this boom is developer OKH Global, which on March 11 released documents for an April 3 special general meeting for shareholders to vote on its $118.5 million acquisition of Chip Eng Seng Construction.

OKH Global plans to pay for the acquisition of Chip Eng Seng Construction by issuing new shares at 5.252 cents each.

As at June 30, 2024, Chip Eng Seng Construction’s outstanding order book was in excess of $2 billion, which significantly exceeds the order books of other Singapore-listed construction companies, OKH Global said.

If approved by shareholders, the acquisition will thus enable OKH Global to emerge as one of the significant players in Singapore’s building and construction industry.

Chip Eng Seng Construction is the construction arm of developer Chip Eng Seng, which was privatised in 2022 by investors Gordon and Celine Tang.

Shares of OKH Global rose by more than 33 per cent last week to close at four cents.

Another SGX delisting

One more Singapore Exchange company received a privatisation offer last week, taking the number of firms that could potentially delist from SGX to six so far in 2025.

A consortium formed by the controlling shareholders of Sin Heng Heavy Machinery on March 14 made a voluntary, unconditional offer to take it private at 58 cents per share in cash. That represents a premium of about 6.4 per cent over the heavy-lifting service provider’s last transacted price per share of 54.5 cents on March 13.

The offeror said privatising Sin Heng will provide it with greater control over and flexibility to manage the business without having to worry about the burden of listing and compliance costs.

This comes after Cuscaden Peak Investments – formerly Singapore Press Holdings – on Feb 10 proposed to privatise and delist Paragon Reit, the real estate investment trust that owns the Paragon mall in Orchard Road.

Also in February, mainboard-listed engineer PEC received a proposal by Alliance Energy Services to take it private, while nursing home operator Econ Healthcare (Asia) received an offer for all its shares by a special purpose vehicle indirectly owned by US investment firm TPG Global.

Developer SLB Development and agri-food business Japfa may also be leaving the exchange after receiving privatisation offers from their major shareholders in January.

All six companies cited poor trading liquidity as a reason for going private.

What to look out for this week

The US Federal Reserve is widely expected to keep interest rates unchanged at its policy meeting on March 20, amid uncertainty over Mr Trump’s economic policies, which include spending cuts and sweeping tariffs.

Fed chair Jerome Powell said earlier in March that despite elevated levels of uncertainty, “the US economy continues to be in a good place”, and that “sentiment readings have not been a good predictor of consumption growth in recent years”.

“We do not need to be in a hurry, and are well positioned to wait for greater clarity,” he said.

Analysts widely expect the central bank to hold the benchmark lending rate steady at 4.25 per cent to 4.5 per cent, after similarly doing so in January.