The FTSE ST Industrials Index has significantly outperformed the Straits Times Index (STI) in 2025, achieving a 17% total return. This surge is attributed to global supply chain shifts, increased AI-driven productivity, and a robust pipeline of construction projects. These factors have contributed to $430m (S$588m) in net institutional inflows into the industrial sector during the first half of 2025.
ST Engineering has emerged as the top performer within the FTSE ST Industrials Index and the STI, boasting a 78% total return. This success is underpinned by its diversified operations across aerospace, defence, and smart city domains, alongside strategic digital investments. The company’s target price has been upgraded from $3.67 (S$5.02) to $6.06 (S$8.30), reflecting market confidence.
OKP Holdings has also seen remarkable growth, with its share price surging 200% year-to-date. The company, which operates in construction, maintenance, and rental, has a market cap nearing $220m (S$300m) and an order book of $540m (S$736m). OKP’s recent $189.5m (S$258.3m) contract from the Land Transport Authority for new cycling paths further strengthens its position.
The industrial sector’s momentum is supported by the shift of supply chains from China to Southeast Asia and India, driven by geopolitical and economic factors. The rapid adoption of AI and automation is transforming productivity, particularly in construction and logistics, reinforcing infrastructure strength across the region.
As the industrial sector continues to thrive, companies like ST Engineering and OKP Holdings are well-positioned for sustained growth, bolstered by strategic investments and technological advancements. This trend is expected to continue, with the sector maintaining its appeal to institutional investors.
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