Core Viewpoint - United Overseas Bank Limited (UOB) reported disappointing financial results for the third quarter and the first nine months of FY2025, with significant declines in net profit attributable to shareholders due to increased allowances for credit and other losses [3][15]. Financial Performance Summary 3Q FY2024 vs. 3Q FY2025 - Net Interest Income decreased by 7.9% year-on-year to S$2,265 million, attributed to margin compression as net interest margin fell by 0.23 percentage points to 1.82% [4][5]. - Net Fee & Commission Income fell by 2.4% to S$615 million, impacted by card rewards expenses but partially offset by growth in loan-related, wealth, and card activities [4]. - Other Non-Interest Income dropped by 30.4% to S$518 million due to lower trading and investment income compared to record highs last year [4]. - Total Income declined by 11.4% to S$3,398 million, while Total Expenses decreased by 5.6% to S$1,535 million [3]. - Net Profit Attributable to Shareholders plummeted by 72.5% to S$443 million due to a significant increase in allowances for credit and other losses [5]. 9M FY2024 vs. 9M FY2025 - Net Interest Income decreased by 3.0% to S$7,009 million, reflecting a 13 basis point contraction in net interest margin to 1.91% [7]. - Net Fee & Commission Income increased by 6.4% to S$1,945 million, driven by record contributions from wealth management and loan-related fees [6]. - Other Non-Interest Income fell by 12.2% to S$1,565 million as trading and investment income normalized [7]. - Total Income decreased by 2.9% to S$10,519 million, while Total Expenses slightly decreased by 2.1% to S$4,629 million [6]. - Net Profit Attributable to Shareholders declined by 27.7% to S$3,271 million due to a 176.1% increase in allowances for credit and other losses [8]. Key Financial Ratios - Net Interest Margin decreased from 1.91% to 1.82%, reflecting the impact of falling benchmark rates [10]. - Return on Equity fell by 7.6 percentage points to 3.5%, a multi-year low, due to a significant drop in profit attributable to shareholders [11]. - Non-Performing Loans Ratio remained stable at 1.6%, despite a 7.8% increase in non-performing assets to S$5,809 million [11]. Management Outlook - The CEO emphasized the bank's resilience and commitment to enhancing provision coverage, while maintaining dividend commitments and share buyback plans [12][13]. - The bank aims to leverage its strengths and invest in growth opportunities within the ASEAN region despite global uncertainties [14].

Core Insights - Singapore's retail sales growth is slowing down due to a decrease in tourist arrivals and an increase in local residents' overseas spending [1][2] - The September retail sales saw a month-on-month decline of 1.4% and a year-on-year growth rate drop from 5.3% in August to 2.8% [1] - The "SG60" neighborhood vouchers issued in July are losing their effectiveness in boosting consumption, with several retail categories experiencing consecutive month-on-month declines [1] Retail Sales Performance - In September, 10 out of 14 retail categories experienced month-on-month declines, with notable drops in computer and telecommunications equipment (-4.0%), gas stations (-5.3%), and supermarkets (-2.2%) [1] - Conversely, department stores (+15.6%) and automobiles (+4.5%) showed positive sales growth [1] Quarterly Overview - For the third quarter of 2025, Singapore's retail sales grew by 4.2% year-on-year, significantly higher than the 1.2% increase in the second quarter [2] - Despite strong employment growth expectations, a decrease in companies' willingness to raise salaries may lead to more restrained consumer spending, potentially suppressing retail activity [2] Future Outlook - October retail sales are expected to be boosted by events such as the F1 Singapore Grand Prix, large concerts, and an influx of Chinese tourists during the "Golden Week" from October 1 to 8 [2]

Core Viewpoint - The recent sharp decline in spot gold prices is viewed as a necessary correction to alleviate excessive speculative long positions accumulated over the past three months, despite the strong long-term fundamentals supporting gold prices [1][2]. Short-term Correction: Digesting Excessive Speculation - Spot gold prices fell from nearly $4,400 per ounce on October 20 to below $3,900 per ounce by October 28, a drop of approximately $500 in just over a week [2]. - The market strategy head at UOB, Heng Koon How, noted that this correction appears more moderate following a three-month "parabolic" surge in gold prices [2]. - The report indicates that the correction is necessary to reduce excessive speculative long positions, with Comex gold futures net non-commercial positions nearing historical highs in early October [2]. Long-term Fundamentals: Still Strong - UOB maintains that the long-term fundamentals supporting gold prices remain robust, citing ongoing stable allocations by central banks and strong purchases by investors through various channels such as physical gold bars, futures, and ETFs [3]. - Global gold ETF holdings have risen to nearly 100 million ounces, valued at approximately $400 billion, with further upside potential [3]. - Notably, despite the recent price correction, gold warehouse inventories on the Shanghai Futures Exchange have increased from under 20 tons in early July to nearly 90 tons [3]. Institutional Validation and Latest Forecasts - UOB's views are corroborated by the World Gold Council (WGC), which reported a record global gold demand of 1,313 tons in the third quarter of 2025 [4]. - The WGC highlighted that investors continue to dominate the market, with central banks net purchasing 220 tons of gold in the third quarter, reinforcing demand [4]. - UOB has slightly raised its gold price forecasts by $100 per ounce for the next four quarters, projecting prices to reach $4,000 per ounce in Q4 2025, $4,100 in Q1 2026, $4,200 in Q2 2026, and $4,300 in Q3 2026 [4]. - The report notes potential volatility risks due to uncertainties in Federal Reserve monetary policy, but technical analysis suggests solid support at the $3,751 level [4]. - Looking further ahead, if diversification demand for safe-haven assets continues, gold prices could potentially reach $5,000 per ounce [4].

Core Viewpoint - Despite recent significant declines in gold prices, the long-term positive fundamentals for gold remain unaffected, driven by central bank purchases and investor demand for diversification amid increasing de-dollarization narratives [1] Group 1: Market Analysis - Central banks continue to allocate gold, which supports its long-term demand [1] - Investors are purchasing gold through various investment products, indicating a strong interest in gold as a safe-haven asset [1] - The common motivation behind these purchases is the need for portfolio diversification and risk mitigation in a volatile economic environment [1] Group 2: Price Forecast - The bank has raised its gold price forecast by $100 per ounce, projecting prices to reach $4,000 per ounce by Q4 2025 [1] - Further projections include $4,100 per ounce by Q1 2026, $4,200 per ounce by Q2 2026, and $4,300 per ounce by Q3 2026 [1]

Core Points - The Federal Reserve decided to lower the federal funds rate target range by 25 basis points to 3.75%-4.00% during its meeting on October 28-29, marking the second rate cut in 2025 following September's decision [1] - The Fed announced it will stop monthly reductions of its balance sheet starting December 1, effectively ending the quantitative tightening process that began in 2022 [1] - UOB's macro research report indicates a possibility of another 25 basis point rate cut in December, with two additional cuts expected in 2026 [1] Summary by Sections Federal Reserve Decision - The rate cut decision was not unanimous, with a vote of 10 to 2, indicating differing opinions among Fed officials [1] - Fed Governor Miran opposed the decision, advocating for a 50 basis point cut, while Kansas City Fed President Schmid preferred to keep rates unchanged [1] Economic Context - Fed Chair Powell described the October rate cut as a "risk management measure" aimed at aligning policy closer to a neutral stance [2] - Powell acknowledged the limitations in obtaining key economic data due to the ongoing government shutdown, suggesting a cautious approach for the December decision [2] Market Expectations - Despite Powell's cautious remarks, market expectations for a December rate cut decreased from "almost certain" to 67.1%, yet UOB maintains its forecast for a 25 basis point cut [2] - UOB predicts that by the end of 2025, the upper limit of the federal funds rate target range will reach 3.75%, with two additional cuts anticipated in 2026, bringing the terminal rate to 3.25% [2] Upcoming Meetings - The next FOMC meeting is scheduled for December 9-10 [3]

Core Points - The Federal Reserve decided to lower the federal funds rate target range by 25 basis points to 3.75%-4.00% during the meeting on October 28-29, marking the second rate cut in 2025 following September's decision [1] - The Fed announced it will halt the monthly reduction of its balance sheet starting December 1, effectively ending the quantitative tightening (QT) process that began in 2022 [1] - UOB's macro research report indicated that the Fed may cut rates by another 25 basis points in December and potentially two more cuts in 2026 [1] - The rate decision was not unanimous, with a vote of 10 to 2; Fed Governor Miran opposed the decision, advocating for a 50 basis point cut, while Kansas City Fed President Schmid preferred to maintain rates [1]

Group 1 - The Federal Reserve decided to lower the federal funds rate target range by 25 basis points to 3.75%-4.00%, marking the second rate cut in 2025 following September's decision [1] - The Fed announced it will stop monthly reductions of its balance sheet starting December 1, ending the quantitative tightening process that began in 2022 [1] - UOB's macro research report indicates a possibility of another 25 basis point rate cut in December, with two additional cuts expected in 2026 [1][2] Group 2 - The rate decision was not unanimous, with a vote of 10 to 2; dissenting opinions included a call for a 50 basis point cut and a preference to maintain the current rate [1] - Fed Chair Powell described the October rate cut as a "risk management measure" aimed at aligning policy closer to a neutral stance, acknowledging data limitations due to the government shutdown [2] - Market expectations for a December rate cut decreased from "almost certain" to 67.1% following Powell's cautious remarks, although UOB maintains its forecast for a 25 basis point cut [2]

Core Insights - The article illustrates the long-term investment potential of United Overseas Bank Limited (UOB), emphasizing the benefits of compounding through dividends and capital appreciation over a decade. Investment Performance - In 2015, UOB shares were priced at S$24.50, allowing an investment of S$10,000 to purchase 400 shares [2] - The share price experienced a significant drawdown of -31.4% to S$16.81 in early 2016, but later appreciated by 79.3% to S$30.14 by early 2018 [3] - From the 2018 peak, the share price declined by 41.7% to a COVID-low, followed by a rally of 95.5% to S$32.86 by early 2022, resulting in a 34.1% increase from the initial buy point [4] - The share price then fell 20.9% to S$25.99 in late 2022, before rebounding 48.8% to a recent high of S$38.67, with the current price at S$34.93 as of October 16, 2025 [5] - Overall, the capital gain from the initial investment is 42.6%, translating to a compound annual growth rate (CAGR) of 3.6% [6] Dividend Income - UOB has consistently paid dividends over the past decade, totaling S$13.28 per share since 2015, including special dividends [7] - An investor holding 400 shares would have earned S$5,312 in passive dividend income [8] - The dividend yield in 2015 was 2.9%, increasing to 5.4% in the last twelve months, with a payout ratio rising from 36.3% to 50.6% [9] Total Shareholder Return - The total gain for a UOB investor over the past decade is S$9,484, bringing the total investment value to S$19,484, which is a 94.8% increase from the initial purchase price [10] - The CAGR of the investment over the last ten years is 7.0%, outperforming the Straits Times Index's CAGR of 6.3% [10] Financial Performance - UOB's net interest income (NII) grew from S$4.9 billion in 2015 to S$9.7 billion by June 2025, with a CAGR of 7.3% [11] - The bank's loan book expanded at a CAGR of 5.4% to S$342.9 billion, supporting its strong dividend policy [12] - UOB maintains a strong CET1 ratio of 15.3% in 1H2025, significantly above the regulatory standard, providing resilience against market fluctuations [13] Investment Philosophy - UOB exemplifies the advantages of long-term investing in quality dividend-paying stocks, highlighting the importance of patience and compounding for wealth accumulation [14] - The article concludes that a long-term mindset can lead to rewarding outcomes for investors, emphasizing the value of holding strong dividend-paying shares through market cycles [15]

Core Insights - Companies in Singapore are actively engaging in share buybacks, indicating management's confidence in their own valuations amidst market uncertainties [1][17] - Notable participants in the buyback activity include United Overseas Bank (UOB), Oversea-Chinese Banking Corporation (OCBC), and Sembcorp Industries, with combined repurchases exceeding S$900 million in September [1][17] United Overseas Bank (UOB) - UOB repurchased S$561 million worth of shares, representing nearly 1% of its market capitalization [3] - The bank reported total income of S$7.1 billion, a 1.8% year-on-year increase, while net profit declined by 2.9% to S$2.8 billion due to pre-emptive provisions [4] - Non-interest income rose 6.3% year-on-year to S$2.4 billion, driven by an 11% increase in fee and commission income [5] - UOB's asset quality remained stable with a non-performing loan (NPL) ratio of 1.6% [6] Oversea-Chinese Banking Corporation (OCBC) - OCBC engaged in S$349 million in share buybacks, approximately 0.5% of its market capitalization [7] - The bank's total income slightly decreased by 1% year-on-year to S$7.2 billion, with net profit falling 6% to S$3.7 billion [8] - Net interest income fell by 5% year-on-year to S$4.6 billion, while non-interest income increased by 8% to S$2.6 billion [9] - OCBC's asset quality remained strong with an NPL ratio of 0.9% [10] Sembcorp Industries - Sembcorp Industries repurchased S$59 million in shares, around 0.5% of its market capitalization [12] - The company reported an 8% year-on-year decline in revenue to S$2.9 billion, while net profit edged down 1% to S$536 million [13] - Free cash flow improved significantly to S$241 million from negative S$51 million a year ago, reflecting progress in its transformation strategy [13][14] - Sembcorp raised its interim dividend by 50% to S$0.09 per share, indicating confidence in its ongoing transformation [15]

Core Viewpoint - The U.S. Federal Open Market Committee (FOMC) decided to lower the federal funds rate target range by 25 basis points to 4.00%-4.25%, marking the first rate cut in 2025 after maintaining rates steady for six consecutive meetings [1] Group 1: Rate Decision - The rate decision was passed with a vote of 11 in favor and 1 against, with Stephen Miran opposing the decision, advocating for a larger cut of 50 basis points [1] - The adjustment in the assessment of the labor market was identified as a key reason for the rate cut, with recent employment growth slowing and a slight increase in the unemployment rate [1] Group 2: Future Outlook - The updated "dot plot" indicates that policymakers expect two more rate cuts by the end of 2025, with predictions of 25 basis point cuts in October and December meetings [1] - The upper limit of the federal funds rate is projected to reach 3.75% following these anticipated cuts [1] Group 3: Powell's Stance - Despite the rate cut, Chairman Powell's statements leaned towards a "hawkish" tone, describing the cut as a "risk management" measure rather than signaling the start of a new rate-cutting cycle [2] - Future monetary policy decisions will be based on subsequent economic data and will not follow a predetermined path [2]