The Straits Times Index (STI) has achieved a new milestone, closing at 4,546.07 after hitting a record high of 4,575.91. This marks a 25.8% total return for the year up to 14 November, bolstered by analyst upgrades and strategic shifts among non-bank constituents. The STI’s performance has been supported by modern investment platforms, which have encouraged gradual exposure to exchange-traded funds (ETFs) and stocks.
The STI’s competitive valuations, with a price-to-book (P/B) ratio of 1.5x, reflect a rise from 1.3x in June. ST Engineering led the STI constituents in 2025, delivering an 85% total return and maintaining the highest P/B ratio at 9.8x. The company’s success is attributed to a 74% upgrade in its consensus estimate target price.
The STI’s performance is significantly influenced by its three major banks—DBS Group Holdings, Oversea-Chinese Banking Corporation, and United Overseas Bank—which collectively account for 50.4% of the index. These banks reported a combined Non-Interest Income (NOII) exceeding S$5b for the first time in Q3 2025, marking a 13% increase from Q2 2025.
The STI’s robust performance in 2025 has been driven by strategic transformations and macroeconomic factors. Notably, DBS is the only bank among the top 10 STI stocks by total return for the year. The index’s overall strength is further evidenced by the significant growth in STI ETFs, which saw a 36% year-on-year increase in assets under management, reaching S$3.38b.
As the STI continues to evolve, its strategic shifts and analyst upgrades are expected to sustain its competitive edge in the market.
