The Straits Times Index (STI) recorded an impressive 8.8% rally in July, reaching 5,628.50 and setting an all-time high of 5,713.19 on 29 July. This surge represents the strongest monthly gain since November 2020, driven by robust demand in AI-related sectors, infrastructure investments, and resilient services. The STI’s total return for the first seven months of 2026 stands at 24.0%.
Banks within the STI averaged gains of 13.3% in July, with investors eagerly awaiting the 1HFY26 results due on 6-7 August. These results will reveal whether record non-interest income and loan growth have continued to offset the impact of lower interest rates. Since the end of 2019, the weightings of these banks in the MSCI AC ASEAN Index and FTSE ST ASEAN Index have more than doubled.
July’s market dynamics saw a shift from semiconductor-related stocks, which experienced profit-taking, to banks, REITs, property, and transport-related stocks emerging as top performers. Singapore’s market benefited from its heavier weighting in financial, industrial, and transport stocks, outperforming several North Asian markets.
Financial services dominated the list of top performers in July, with Great Eastern Holdings, Pan-United, and OCBC leading the charge. Great Eastern reported strong 1H26 results, showcasing double-digit growth in new business sales and earnings.
As Singapore enters the second half of 2026, economists forecast GDP growth of around 3.5% for the year, with a slight moderation expected in 2027. The upcoming financial results will be crucial in determining whether institutional investors continue their recent portfolio rebalancing or shift focus back to sectors that led earlier gains in 2026.
