Market Review November 2025
Risk assets continued to move higher in October, particularly in markets which are beneficiaries of AI investments. As expected, the Federal Reserve further cut rates by 25 bps in October. The markets were driven by positive US corporate result announcements. The easing of trade tensions between US and China also lifted investors’ sentiment. The World Index gained 1.94% in October. The MSCI Far East Ex. Japan index chalked up further gain, adding 4.47%, driven by North Asia markets in particular Korea and Taiwan markets. ASEAN equities performance lagged with a return of +2.37%. Vietnam (-1.33%) and Philippines (-0.40%) stood out with negative returns. Hong Kong shares also saw profit taking after strong performance in past months. The performance of regional currencies was mixed against the local currency. The best performing currencies were Malaysia Ringgit (+0.42%) and Vietnamese Dong (+0.42%), while the weaker ones were Taiwanese NT (-0.89%) and Korean Won (-1.78%).
The US markets performed well with broad based gains driven by the Federal Reserve’s dovish stance and easing trade tensions between US and China. The Federal Reserve further cut rates by 25 bps in October as latest US inflation print provided confidence that the backdrop of higher tariff was not translating into higher inflation rate. However, Jerome Powell cautioned that a rate cut in December was not a foregone conclusion. The statement caused market to retrace. For the month, Dow Jones Industrial Average (DJIA) and S&P 500 Index and Nasdaq Composite gained 2.51%, 2.27% and 4.70% respectively.
The Stoxx Europe 600 Index added 2.46% from prior month. The eurozone underperformed as political noise in France and limited exposure to commodities and AI-related tech saw performance lag other regions like the UK and Asia. Europe’s economy continued to show weak but positive momentum heading into the winter. October’s composite PMI hovered at 50.4 supported by services resilience but continued industrial softness, particularly in Germany. The eurozone’s headline inflation eased further to 2.2%, its lowest since mid-2022
Hong Kong and H shares indices witnessed profit taking in October. Hang Seng Index and Hang Seng China Enterprises Index declined 3.53% and 4.05% respectively. Chinese A shares also stayed flat. Chinese economic indicators remained sluggish. Loan data was weak. The latest data in September showed both new social financing and new loans fell short of last year. New loans reached RMB1.29trn, down RMB300bn YoY. New social financing reached RMB3.53trn in September, down RMB229.7bn Year-on-Year. The growth of outstanding social financing moderated to 8.7% in September, from this year’s peak of 9% in July. The Year-on-Year decline of new loans mainly came from short-term household loans and bill financing. However, China’s exports growth bounced up in September, expanding 8.3% Year-on-Year after rising 4.4% in August, beating market consensus. The surging exports growth reflected the tailwinds from low base last September, expanding global manufacturing activities, robust growth of exports to emerging markets and product competitiveness of machinery and high-tech products.
South Korea’s KOSPI Index surged 19.94% higher in October, driven by Samsung Electronics over positive outlook on memory sector recovery and strong global AI demand outlook. Bank of Korea (BOK) official announced that the Korean economy is likely to grow at a higher-than-earlier forecast rate, probably expanding by more than 1%, though structural reforms will be needed to support sustainable growth. In the July–September period, the economy expanded 1.2% on-quarter, surpassing the BOK’s forecast of 1.1% growth.
Taiwan’s TWSE Index gained 9.34%. The gain was driven by global technology sector strength. Taiwan export orders continued to show strength. Taiwan export orders reached US$70.22bn in September, up 17.0% MoM (up 5.1% MoM seasonally adjusted), and up 30.5% YoY, beating consensus of 18.7% YoY growth. On a quarterly basis, 3Q25 orders were up by 6.3% QoQ and 23.8% YoY, both reflecting a strong growth trajectory. On domestic consumer, the Taiwan Cabinet’s NT$10,000 (US$320) cash handout program will begin on November 12 and is expected to boost GDP by as much as half a percentage point.
Singapore’s STI gained 2.99%. On the economic front, retail sales rose 5.2% Year-on-Year, the strongest since February 2024, led by furniture, household goods, and recreational items, though department stores and mini-marts saw declines. PMI readings signalled broad strength: the S&P Global PMI jumped to 56.4 (fastest growth in a year) on stronger demand, employment, and purchasing activity, while the manufacturing PMI edged up to 50.1, with electronics leading gains. Inflation pressures resurfaced, with input costs and selling prices rising at the fastest pace since January.
Malaysia’s KLCI declined 0.17%. Advance official estimates indicated that Malaysia’s economy grew 5.2% in the third quarter of 2025, up from a 4.4% growth in the previous quarter. Economic momentum in Malaysia strengthened in the third quarter, underpinned by solid performance in all main sectors. Domestic demand continued to be the primary engine of growth, particularly in tourism-related activities during public and school holidays. Sustained capital investment and rising external demand further bolstered economic expansion, despite headwinds from uncertain trade policies.
Thailand’s SET Index strengthened further, gaining 2.77%. Thailand’s manufacturing PMI rose to 54.6 in September 2025 (Aug: 52.7), the strongest since May 2023 and marking five months of growth. Domestic demand drove higher new orders and output, while exports contracted for a second month. Firms boosted purchasing and employment at the fastest pace in a year. Input costs fell for the third month, prompting the first drop in selling prices since March. Business confidence improved to the highest in over two years
Jakarta Composite Index gained 1.28%. The S&P Global Indonesia manufacturing PMI slipped to 50.4 in September 2025 from August’s 51.5, still indicating a second month of factory activity expansion. New orders rose while output fell. External demand remained subdued. Firms raised input purchases and increased hiring for the second month to meet demand. Indonesia’s annual inflation rate accelerated to 2.65% in September 2025, up from 2.31% in August, driven mainly by food prices (+5.01% vs 3.99% in August). Core inflation edged up slightly to 2.19% from August’s 2.17%.
The Philippines PSE Index continued to correct, dropping 0.40%. The Philippines’ annual inflation rose to 1.7% in September 2025 from 1.5% in August, the highest since March but below expectations of 2%, mainly due to higher food and transport costs. The unemployment rate eased to 3.9%, with employment rising to 50.1 million and the labour participation rate improving to 65.1%, reflecting stronger labour market conditions. However, domestic consumption remained fragile.
Vietnam’s VN-Index declined 1.33% on continued profit taking after strong performance in earlier months. The manufacturing PMI stayed at 50.4 in September, its third month of slight growth. New orders and exports improved, and output rose for a fifth month, though momentum eased. Employment fell for the 12th straight month, while input costs jumped, pushing selling prices up at the fastest pace in 14 months. Firms remained cautiously optimistic, supported by demand and public investment, though sentiment is weaker than average.
Market optimism over the election of Donald Trump as the new US President on expectations that his policies would be positive for the US had sparked a recalibration of macro variables and asset allocation decision. However, the US Administration’s subsequent tariff announcements and the inconsistent and frequent policy changes made in their wake had led to heightened market gyrations and volatility. Following the broad sell off after the announcement of across-the-board reciprocal tariffs on “Liberation Day”, the markets have recovered much of their losses as the shifting tariffs landscape seem to have reached some stability. With the finalization of tariff rates with majority of US’ trading partners, trade matters are heading into tailwind, at least for now. As for the US tariff for China, the US and China teams held talks in Kuala Lumpur followed by a meeting between President Trump and President Xi in Busan. Both sides described the meetings as constructive. The US did not proceed with the threatened 100% tariff, and agreed to cut tariffs on China goods from 57% to 47%, while the tariffs on fentanyl related chemicals were reduced from 20% to 10%. The US also agreed to suspend port fees on Chinese shipments. China, on its part, agreed to suspend export restrictions on rare earth elements, and committed to resume purchase of US soybeans. It remains a matter of conjecture as to whether the tariff dusts have really settled for good.
During his Presidential election campaign, Donald Trump had also pitched to bring about a quick end to the Russia-Ukraine war should he be elected. Since his inauguration as US President, Trump has made moves, seeking to bring about a cessation of the conflict in Ukraine. The latest being a face-to-face Summit between him and President Putin held in Anchorage on August 15. An end to the Ukraine conflict would be positive for the equity markets. However, a peaceful resolution of the conflict does not appear to be any nearer. It remains to be seen whether Trump and his administration will succeed in orchestrating a cessation of the conflict in Ukraine. If this does happen, it would change the geopolitical landscape in Europe and beyond. Meanwhile, in the Middle East, Israel and Hamas have agreed to a fragile ceasefire at the behest of Trump. This is very much welcomed, but geopolitical headwinds remain.
The US Fed lowered the rates further by 25 basis points in October. The market expects further reductions in the rest of the year and early 2026, although Fed Chairman, Powell, was somewhat ambivalent about the prospect of a December cut. The shift of market focus to dovish monetary stance will likely be supportive of risk assets in near term. The market is still divided on impact of higher tariffs on macro variables such as inflation and economic activities. US corporate earnings especially in the technology sector continue to be key pillar to hold up risk assets. High valuation is further supported by strong capital expenditure drive for AI.Questions are starting to emerge as to whether the humongous expenditures in AI will generate the anticipated returns.
We are watchful of geo-political developments as well as policy directions in the major economies, in particular US and in China. The market is keenly watching developments in Trump’s tariffs for the key trade partners. The market is also attentive to other US policy pronouncements that would have major fiscal, financial and economic implications. Investors, by and large, appear to be comfortable with Trump’s “Big Beautiful Bill” that has been signed into law, notwithstanding that it will substantially increase US federal deficit and government debt. Meanwhile, failure by the US to pass a Bill to raise US’ debt ceiling has resulted in a prolonged shutdown of the US government. However, US investors are not unduly concerned about this development, and the US market has taken it in its stride.
In Asia, the focus is on the pace of China’s economic recovery which has been weaker than expected. The tariff issues with the US and continuing efforts to broaden restrictions on sales of tech equipment and services to Chinese entities can only exacerbate the economic situation in China. The Chinese property sector continues to face challenges, and any sign of stabilization and growth will have positive catalyst for China’s economy and risk assets. The Chinese government continues to bring forth various measures to help the economy. The Chinese government remains constructive on policies to spur economic activities to achieve economic growth target. The various measures have boosted market sentiments. However, the longer- term effectiveness on China’s economy continues to be closely watched. It may take time for the initiative to bear fruits. The focus will be on addressing the challenges in the property market, lifting consumer sentiments and consumption, and countering the effects of the new US tariffs.
On external trade, countries with high export dependency for growth in the Asia region including ASEAN will face significant challenges arising from the US tariff policies, even at the agreed rates that are significantly below the levels announced by the US during the “Liberation Day”. The disruption in supply chain realignment may result in temporary mismatch in corporate earnings delivery against market expectation during the initial stage of tariff implementation. This can result in further trading volatility for risk assets. Longer-term, higher tariffs may result in corporate margin erosion and slower earnings growth outlook. Consumers in the importing country may have to pay higher prices, and this translates to higher inflation rate.
While interest rates have started to be eased, there remains headwind for risk assets, including the impact of the still high interest rate on business and economic activities, uncertainties in the US policies post the US Presidential election, the still historically high market valuations in the US, the continuing geo-political tension in Europe, Middle East and in East Asia, and the still slower than expected economic growth in China. However, in the investment space we are in, we believe there is room for cautious optimism. After years of prolonged sell down, and despite the upticks in recent months, China equities are under-owned and their favourable valuation offer potential upside, particularly following the recent rounds of significant policy change initiatives from China. Also, the prospect of further softening of the US dollar could see increasing funds flow out of US assets which could be beneficial for emerging markets including China and ASEAN.
We continue to apply our strategy of focusing on identifying fundamentally healthy companies with low valuations, low leverage, high growth, robust management and a strong track record, and adherence to our investment philosophy of “Never Fully Invest at All Times” which has served us well over the years.
We thank you once again for your continued faith in us, and hope to remain good stewards in our endeavour to protect and grow your capital.