Singapore stocks plunge on US tariff fears

[SINGAPORE] Singapore's Straits Times Index (STI) continued its losing run on April 7, falling more than 325 points, or 8.5%, as trading began, amid concerns that US President Donald Trump's sweeping tariffs will trigger a global recession.

The proposed tariffs, targeting over $300 billion worth of Chinese goods, have sparked concerns of retaliatory measures from Beijing, further destabilizing global trade flows. Analysts warn that Singapore, as a trade-dependent economy, could face significant headwinds if the dispute escalates, particularly in key sectors like electronics, shipping, and finance.

The decrease was the benchmark blue-chip index's worst intraday loss since the 8.9% slump during the global financial crisis on October 24, 2008, and it outperformed the 8.4% decline observed during the Covid-19 sell-off on March 23, 2020. These are the largest losers on the STI as of lunchtime on April 7.

Seatrium

On April 7, shares of the mainboard-listed business fell 14.43% to $1.66. Seatrium, founded by the combination of Sembcorp Marine and Keppel Offshore & Marine, offers offshore renewables, new energy, and cleaner solutions to clients, including American corporations.

The company’s exposure to US energy projects has raised investor concerns, as the new tariffs could increase costs for American clients, potentially leading to deferred or canceled contracts. Seatrium had previously secured multiple contracts from US-based firms in offshore wind and liquefied natural gas (LNG) infrastructure, sectors now under scrutiny due to the trade policy shift.

Yangzijiang Shipbuilding

On April 7, shares of the Chinese shipbuilder fell 11.52 percent to $1.92. The sell-off coincides with a US proposal to impose tariffs on Chinese-built vessels entering American ports.

Yangzijiang Shipbuilding is one of China's largest non-state shipbuilding businesses. According to a bourse filing from November 2024, it has an order book of around US$22 billion.

The potential US port fees, part of a broader effort to curb China’s dominance in global shipping, could directly impact Yangzijiang’s profitability. The company derives nearly 40% of its revenue from vessels destined for Western markets, making it highly vulnerable to trade restrictions. The company was among the top picks by institutional investors on the Singapore Exchange in 2024.

Keppel

Keppel shares declined 10.54 percent to $5.93 on April 7. On January 24, the global asset manager stated that it has secured a license from the US Federal Communications Commission to land the world's first underwater cable system, which would connect Singapore to the west coast of the US via Indonesia, traversing through the Java and Celebes seas.

DBS, OCBC and UOB

Shares of all three local banks plummeted substantially, with DBS Bank leading the way, down over 10% at lunchtime on April 7. At 39.02, DBS is trading below 40 for the first time since November 2024, with yields currently around 5.7%.

Banking analysts attribute the sell-off to rising fears of slower loan growth and higher credit risks, particularly for lenders with significant exposure to regional trade financing. DBS, for instance, has been actively financing cross-border trade between Asia and the US, a segment now facing heightened uncertainty. OCBC Bank sank 7.46% to $15.35, its lowest level since November 2024, while UOB fell 6.12 percent to $33.28.

Semiconductor-related stocks

AEM Holdings, Grand Venture Technology, and UMS Integration, which provide semiconductor-related services, all declined dramatically. On April 7, both AEM and Grand Venture were down more than 14 percent, while UMS, which just gained regulatory approval to launch a secondary listing on Bursa Malaysia, was down more than 9%.

While semiconductors are currently excluded from tariffs, many expect Mr Trump to impose duties on these imports soon. Semiconductors and semiconductor equipment account for around 30% of Singapore's annual exports.

Construction stocks

Local construction stocks fell, with Singapore forecasting weaker growth as a result of the tariffs and their impact in the coming months.

The construction sector, already grappling with rising material costs and labor shortages, now faces additional pressure from potential delays in imported steel and aluminum—key materials affected by the tariffs. Industry players warn that infrastructure projects, including public housing and transport developments, could see cost overruns if the trade measures persist.

OKP Holdings' shares plummeted by over 20% to 51 cents. In March, the shares reached their highest level in ten years, as Singapore's building spending increased. OKH Holdings and ISOTeam both declined, as did Centurion Corporation, which provides housing for foreign workers in Singapore.