“As the global narrative rotates toward income, diversification, and defensiveness, Singapore offers a rare combination of all three..."
Singapore’s equity market is staging a revival as the nation marks its 60th year of independence. The Straits Times Index (STI) recorded a strong July, achieving 17 winning sessions out of 23 — its longest streak in over a decade. Attractive yields, valuation support and robust foreign inflows are driving momentum, and investors are taking note.
Charu Chanana, chief investment strategist at Saxo, says the rally is supported by Singapore’s position as a global hub, combined with safe haven appeal and leadership in technology. “Singapore continues to attract talent, capital and businesses, with leadership in finance, trade and digital infrastructure,” she says. Chanana highlights political stability, the rule of law and neutrality as factors that make Singapore “a natural destination in a risk-off world.”
A series of structural and cyclical forces are coming together to bolster sentiment. Singapore has carved out a leadership position in the global technology sector. “Among the top 10 AI markets globally, Singapore is investing in autonomous vehicles, humanoids, and data infrastructure — poised for long-term productivity gains,” Chanana notes.
Ongoing supply chain shifts, especially those tied to China+1 strategies and regional industrial demand, are also benefiting Singapore. Policy support is another factor, with the Monetary Authority of Singapore’s (MAS) $1.1 billion equity development plan underlining the state’s commitment to capital market growth.
A further sign of confidence: renewed activity in the IPO market. “The NTT DC REIT IPO — Asia’s largest this year — signals renewed investor interest in yield and infrastructure,” Chanana says.
Singapore’s valuation and currency backdrop are also in focus. “Attractive equity multiples and SGD stability stand out in a world of stretched valuations and USD softness,” she adds.
With a 4.76% dividend yield, the STI remains a draw for income investors.
While Singapore’s banks — DBS, OCBC and UOB — remain reliable dividend anchors, Chanana points to multiple opportunities outside the index heavyweights.
In AI and semiconductors, UMS Holdings and AEM Holdings are highlighted as key suppliers to global chipmakers and providers of AI-focused semiconductor testing solutions. ST Engineering is cited as a diversified defence-tech firm with growing exposure to smart city and cybersecurity solutions.
Digital wealth and technology platforms are also emerging themes. Chanana singles out iFast, a digital wealth platform gaining assets under management across Asia, and Sea Ltd, which she describes as “a leading Southeast Asia digital ecosystem across e-commerce, gaming, and fintech”.
Consumer staples are in focus as well. “Sheng Siong is a value supermarket chain benefiting from cost-conscious consumer demand,” she says. DFI Retail Group, which operates grocery and convenience chains across Asia, is undergoing margin recovery and digital transformation.
Infrastructure plays are led by Singtel, a regional telco with growing data centre exposure and a stable dividend yield. On the energy and industrials front, Sembcorp Industries is seen as a leader shifting toward renewables, while Hong Leong Asia offers exposure to construction and heavy equipment.
Investors seeking China exposure through Singapore can look to SGX-listed SDRs of companies like Alibaba, JD.com, BYD, SMIC and PetroChina.
REITs are rebounding too, with CapitaLand Integrated Commercial Trust, CapitaLand India Trust and Keppel DC REIT all offering different sectoral and geographic exposure.
ETF options are also available for those looking to tap into Singapore’s themes, from the Nikko AM Singapore STI ETF for broad exposure to the Lion-OCBC Securities Singapore Low Carbon ETF for an ESG-aware approach, and CSOP iEdge Southeast Asia Plus Tech ETF for regional tech plays.
Chanana cautions that risks are present, including “rising protectionism or tariffs” that could impact trade-linked sectors, a potential “reversal in USD weakness,” volatility from China, and possible policy surprises such as “unexpected property or tax measures.”
Looking ahead, she sums up the appeal: “As the global narrative rotates toward income, diversification, and defensiveness, Singapore offers a rare combination of all three — backed by policy support, infrastructure growth, and deepening regional relevance.”
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