Singapore’s 30 largest stocks gain 5% in first quarter of 2026, but Iran war keeps markets on edge

SINGAPORE – Buoyed by reforms to the local equities market, Singapore stocks performed well in the first quarter of 2026, but markets have since turned more volatile as the Iran war clouds the outlook.

The Straits Times Index (STI) rose 5.1 per cent between January and March to 4,885.45 points, with dividends lifting total returns to 5.6 per cent, data from the Singapore Exchange (SGX) showed.

It noted that the STI’s performance was strong compared with other indexes: The FTSE APAC Index delivered 0.4 per cent total return, and the FTSE World Index declined 3 per cent in Singapore dollar terms.

“The STI’s outperformance against regional peers and sustained fund inflows into Singapore equities in March reinforce its safe-haven status,” DBS Bank analysts wrote in an April 1 report.

“This is also supported by Singapore’s resilient growth momentum heading into this conflict, and by oil prices rising in a way that lifts inflation without materially denting growth.”

The 10 best-performing stocks in the first quarter, among those with market capitalisations over $10 billion, included ST Engineering, Wilmar, SGX, Hongkong Land, Keppel, OCBC Bank and Sembcorp.

Banks in the limelight

Some companies have seen gains as the Iran war entered its fifth week.

OCBC surpassed $100 billion in market capitalisation for the first time, as its shares breached the $22 mark on March 31.

This was buoyed by potential wealth inflows from the Middle East and another interest rate cut on its flagship savings account.

Analysts said all three local banks are likely to benefit from wealth inflows, but cautioned that a risk-off environment could curb investment activity and limit deployment into higher-yielding assets.

OCBC shares closed on April 2 at $22.38, up more than 4 per cent this week.

DBS also rose. Its chief executive Tan Su Shan said during the bank’s annual general meeting on April 1 that the first-order impact of the war on the bank is “very little” as it has minimal exposure to the region, with Asia as its core market.

DBS shares closed at $57.55 on April 2, up by more than 1 per cent across the week.

Other STI counters advance

ST Engineering said on April 1 that its marine unit has secured a six-year sub-contract worth about $600 million from Abu Dhabi Ship Building to design and supply platform systems for eight missile gunboats being built for the Kuwait Naval Force.

In addition to delivering the full suite of platform design, integration and technical expertise, ST Engineering will build three of the vessels at its Singapore shipyard.

Mr Tan Leong Peng, president of ST Engineering’s marine business, said: “This win strengthens ST Engineering’s growing momentum in international defence markets, underscoring the group’s ability to deliver sophisticated naval platforms and capture rising demand for advanced maritime security solutions in the Middle East.”

ST Engineering, which started the week trading below $11, rose to a high of $11.20 on April 2 before paring gains to close the week at $11.03.

CapitaLand Investment (CLI) also rose, closing on April 2 at $2.74, up 1.9 per cent through the week.

The company said in its annual report released on April 2 that it will step up capital recycling and review options for its China assets, after softer market conditions slowed divestments to $3.1 billion in 2025 from $5.5 billion a year earlier.

Revaluation losses also widened to $439 million in 2025, largely due to its China portfolio.

A revaluation loss is an accounting loss that happens when a company marks down the value of its assets to reflect current market conditions.

In their letter to shareholders, CLI’s chairman Miguel Ko and group CEO Lee Chee Koon said the group will accelerate divestments while staying disciplined on new investments moving forward.

Layoffs at Yeo’s

Packet drinks brand Yeo Hiap Seng (Yeo’s) closed unchanged at 60 cents on April 2 despite laying off 25 employees at its Senoko facility on March 31, as it moves its can manufacturing operations to Johor and Selangor in Malaysia.

The affected roles are in can manufacturing, and involve both local and foreign employees. The company now has about 245 employees in Singapore following the layoffs, and around 1,300 across its overseas operations.

In a bourse filing, Yeo’s said it is restructuring its business model in Singapore due to changing consumer patterns and retail conditions as well as increasing cost pressures.

It will continue to ensure a stable supply of products to meet consumer demand in Singapore following the move, a spokesperson said.

Third Catalist listing in 2026

Catalist could soon see its third listing for the year, after sports events management company Kin Global lodged a preliminary prospectus for an initial public offering (IPO) on the Catalist board.

The company behind major sports events in Singapore, including the World Aquatics Championships and World Table Tennis Singapore Smash, is offering both new shares and vendor shares by co-founders Ko Chee Wah and Vincent Chai, who will retain control of the company post-listing.

While the final offer size and pricing have yet to be disclosed, cornerstone investors including Amova Asset Management Asia, Apricot Capital and Qilin Wealth Fund have committed to subscribing for shares, subject to listing conditions.

The company said IPO proceeds will be used for acquisitions, investments in new attractions and working capital to support bids for larger as well as recurring contracts to tap the rise of what it calls “event tourism”.

Since the start of 2026, two companies have listed on the Catalist board – co-living operator The Assembly Place and cloud communications platform Toku.

What to look out for next week

Markets, including Singapore’s, should continue to be volatile next week, after US President Donald Trump in his address to the nation on April 2 revealed no clear end to the Iran war.

He said in the televised address that the US would strike Iran hard over the next two to three weeks, but did not set a timeline for ending the conflict.

Before the speech, the price of benchmark Brent crude was trading at about US$100 a barrel. Afterwards, it rose to US$105.

The STI, which had been over 4,980 points before Mr Trump spoke, fell to as low as 4,927.6 on April 2. The STI closed down by over 28 points, at 4,947.5.

Analysts are on the fence as to what the speech meant with regard to the war.

Rystad Energy chief economist Claudio Galimberti said: “President Trump’s address anchors expectations towards a relatively rapid de-escalation, with a stated timeline of weeks rather than months.”

He noted that the message implicitly carried the assumption that if hostilities by the US end, oil flows through the Strait of Hormuz could be normalised, but added that “this will not be automatic, as the resumption of shipping depends on security assurances, insurance coverage and a return of operational confidence”.

“Until there is greater clarity on the path to de-escalation, markets are likely to remain highly volatile.”

St James’s Place head of Asia and Middle East investment advisory Martin Hennecke said initial optimism that the war could end soon was quickly dampened by Mr Trump’s later remarks about hitting Iran “extremely hard”.

He added that higher energy prices could drive inflation, posing risks not just to investment markets but also to cash, as rising prices erode purchasing power when interest rates lag behind inflation.

As the war continues, agri-commodity stocks might benefit from renewed tensions which keep oil prices elevated, the DBS report on April 1 said. These include companies like Wilmar and utilities company Sembcorp Industries.

Continued volatility without resolution is also likely to shift attention to stocks with resilient drivers that are independent of geopolitics, the report added. These include banks, SGX and tech stocks like UMS and iFast.

If oil prices remain elevated above US$100 per barrel for longer, it would also boost oil and gas-related stocks like Seatrium and Nam Cheong, the report said.