The Hang Seng Index experiences a technical correction; analysts suggest that high valuations may suppress upward momentum

Analyst: Stock Market Pullback Provides Entry Opportunity In a written response to shareholder questions regarding delisting matters before the shareholders' meeting on Saturday (26th), AMOS Group Limited stated that the voluntary unconditional general offer for all issued ordinary shares of AMOS Group by PeakBayou Company expired on December 12 last year. After 68.01% of independent shareholders accepted the offer, PeakBayou held 94.62% of the company's shares, causing the company to no longer meet listing requirements, and trading of the stock was subsequently suspended. AMOS Group then applied to the Singapore Exchange to extend the trading suspension until September 10 this year, allowing both parties to continue exploring the delisting plan. In individual stock news, chip testing company AEM Holdings announced on the Singapore Exchange website that its president Liang Chunyi (50 years old), who has been in office for only a year, has resigned, effective immediately. The group revealed that the reason for the resignation was "a leadership restructuring led by the board to promote growth." The group also announced that after a comprehensive and prudent assessment, the board decided to appoint a successor from within. The new president is Samer Kabbani (51 years old). Boosted by strong earnings season performance and optimistic trade agreement prospects, the U.S. stock market rose broadly last Friday (July 25). The Straits Times Index in Singapore failed to maintain its upward momentum, falling 0.28% to 4261.06 points last Friday. Analysts noted that the market pullback was mainly influenced by profit-taking, and the local stock market may experience short-term fluctuations in the near future. The group revealed that Kabbani has been leading the company's testing technology development since joining in September 2020, and thus the board deemed him the most suitable successor. AEM Holdings closed at SGD 1.72 on Friday, up 1.78%. As the August 1 tariff deadline approaches, Hu Lihui, financial services manager at Phillip Securities, expects some market fluctuations in the short term as investors adjust their positions to cope with related uncertainties, but the expected impact is relatively limited. Hu Lihui predicts that the mid-term key support level for the Straits Times Index will be at 4000 points. If this level can be maintained, the index is expected to test the 4400-point mark and may continue to rise and break through the 4700-point resistance level. Chen Dade, chief strategist for wealth management at Amundi Asia, told Lianhe Zaobao that the relative strength index (RSI) of the Straits Times Index is already in the overbought zone, and this pullback is a healthy technical adjustment. Chen Dade reminded investors to remain cautious and not to continue increasing their positions, suggesting that they should take profits at the right time and consider increasing their bond holdings to diversify risks. He said, "In the context of de-dollarization, geopolitical risks, and increasing uncertainties, the Singapore dollar is seen as a safe-haven currency. Since the beginning of the year, the Singapore dollar has appreciated about 6% to 7% against the U.S. dollar. Additionally, the yield on six-month treasury bills is below 2%, and future interest rates may decline due to potential rate cuts by the Federal Reserve. The average yield of Singapore Real Estate Investment Trusts (S-REITs) is 5% to 6%, while the yield of the Straits Times Index is 4%, providing attractive investment opportunities for investors, especially in the current uncertain and turbulent times When discussing the upcoming investment strategy, Hu Lihui suggested that short-term investors consider reducing risk exposure, especially those Singapore-listed companies that sell goods and services to the United States or derive most of their income from the U.S. Further Reading He believes that the Straits Times Index still has upside potential, although the current valuation is relatively high, and the upward resistance is increasing. "For medium to long-term investors, any pullback may present an opportunity to accumulate more local assets, especially those with quality real estate investment trusts and decent dividend yields. Sectors worth paying attention to include healthcare, real estate investment trusts, transportation, real estate, and semiconductors." "Recently, the Straits Times Index has continued to rise, reflecting, to some extent, the market's digestion of tariff news and the expectation that U.S. President Trump will not take further measures against Singapore. The government has also been promoting broader participation of fund managers in the local stock market. However, these positive factors have basically been digested by the market, and once negative news arises, the risk of market sell-off will significantly increase."