STI dips from 5,000-point high, index heavyweight DBS loses gains

SINGAPORE – The Straits Times Index (STI) surged past the 5,000-point mark for the first time on Feb 12, after the Government unveiled new measures in Budget 2026 aimed at reviving the local stock market, supporting start-ups and attracting more listings to Singapore.

STI on Feb 12 hit a high of 5,021.27 in intraday trading, before closing the day at a record 5,016.76. This was led by blue-chip stocks such as OCBC Bank and Singtel, which also closed at record highs.

On Feb 13, the index opened at 4,985.59 before ending the week at 4,937.78 – 0.07 per cent higher than the previous week’s close of 4,934.

The

Monetary Authority of Singapore (MAS) will inject another $1.5 billion

to increase investor participation in Singapore equities, thereby expanding the Equity Market Development Programme (EQDP) from $5 billion to $6.5 billion.

As part of the EQDP, MAS has allocated $3.95 billion to nine asset managers so far and is expected to announce a third tranche of managers under the EQDP some time in 2026.

Market insiders called the $1.5 billion top-up a positive move, with J.P. Morgan analysts saying that the outlook for Singapore equities remains positive amid a strong macro backdrop, positive surprises in the fiscal buffer and a continuing strong government commitment to reinvest and transform the economy.

“We believe these tailwinds, together with an extension of financial market support, should drive Singapore equities closer to our STI 6,000 target,” they said in a Feb 12 note.

A new workgroup was also announced on Feb 13 to develop strategies to strengthen Singapore’s growth capital markets, including venture capital, private equity and private credit, as well as securitised assets.

The Growth Capital Workgroup will recommend measures to support the financing needs of companies from Singapore and the region across various growth stages, from starting up to initial public offerings.

DBS shares pull back from record highs

Shares of DBS Bank ended the week at $57.06 on Feb 13, down 3.3 per cent from the previous week’s close of $59.30 and below its record closing high of $59.79.

The largest heavyweight constituent of the STI on Feb 9 announced that fourth-quarter and full-year 2025 earnings missed analysts’ estimates.

Fourth-quarter net profit fell 10 per cent to $2.26 billion on lower interest rates and missed a Bloomberg forecast of $2.59 billion. Full-year net profit fell 3 per cent to $10.9 billion due to higher tax expenses, also missing analysts’ forecast of $11.27 billion.

Still, the analysts noted that DBS’ attractive dividend yield and its commitment to returning capital over the next two years could help underpin its share price, although some cautioned that the stock appears overvalued at current levels.

Smaller peers OCBC and UOB also closed the week lower. OCBC shares dropped 0.6 per cent to $21.11, while UOB shares inched 0.08 per cent lower to $38.47.

CapitaLand Investment plans second C-REIT

On Feb 11,

CapitaLand Investment (CLI) announced plans

to launch its second commercial China real estate investment trust (C-REIT) by the third quarter of 2026, even as it faced significant losses from asset divestments in China over the past year.

The announcement came alongside the release of its full-year 2025 results, which showed that revaluation losses on its China assets pushed the investment manager into a net loss of $142 million for the second half ended Dec 31, 2025, reversing a net profit of $148 million a year earlier.

CLI said it incurred losses from the divestment of its assets in China, worth about $1 billion. About $700 million worth of assets were sold at a discount of between 10 per cent and 20 per cent, which offset gains from divesting its Japan and India assets.

It nevertheless declared a 12-cent dividend, opting to keep dividends stable over a share buyback.

OCBC Group Research on Feb 12 assigned CLI a “buy” rating with a fair value of $3.63.

“CLI will continue its shift towards an asset-light business model with a strong focus on recurring income streams,” said OCBC analyst Andy Wong, adding that CLI’s funds under management increased 7 per cent year on year to $125 billion, and its target of $200 billion by 2028 remains intact.

CGS International (CGSI) also retained its “add” rating, although it reduced its price target to $4.19 from the previous $4.30.

CGSI analyst Lock Mun Yee noted that the risks include a weaker real estate outlook that could hamper the pace of CLI’s capital recycling activities and a prolonged high interest rate environment that could erode its investment returns.

Shares of CLI fell to $3.06 on Feb 11 before paring losses to close at $3.12 at the end of the week, unchanged from the previous week’s close.

Singtel shares rise, StarHub slides

Singapore’s largest telco operators posted mixed earnings this week.

Singtel on Feb 12 posted a 43.5 per cent jump in net profit to $1.89 billion for the third quarter ended Dec 31, 2025, attributed to a $1.15 billion net exceptional gain from the partial sale of its stake in Airtel.

For the nine months to December, the group posted a net profit of $5.3 billion, up 107.6 per cent from $2.55 billion in the same period a year earlier.

Analysts kept their “buy” calls on Singtel, with RHB assigning a price target of $5.50 and CGS International at $5.34.

An RHB analyst said that the stock’s core investment thesis of return on invested capital accretion, capital recycling and positive earnings delivery remains intact.

CGSI analyst Prem Jearajasingam noted that asset monetisation initiatives are a key re-rating catalyst for Singtel, adding that an expected 4 per cent dividend yield for financial year 2026 lends support to its share price, with upside from improved earnings and payout ratios.

Singtel shares rose 4 per cent over the week to close at $4.91 on Feb 13.

Rival StarHub reported a net profit of $86.4 million in 2025, down 46.2 per cent from $160.5 million in 2024, as price competition put downward pressure on margins.

StarHub said that excluding a one-off forfeiture payment of $14.1 million for the return of a telecommunication spectrum lot, net profit would have been $100.5 million.

RHB downgraded the stock to “sell” with a target price of $1, while Citi analysts downgraded it to “neutral” with a $1.14 target price.

Shares of Starhub closed on Feb 13 at $1.13, down from the previous week’s close of $1.19.

Other market movers

Sheng Siong shares closed the week 7.6 per cent lower at $2.68 after OCBC downgraded the stock to “hold” on Feb 9, although it revised its target price upwards to $2.89, up from $2.77.

OCBC equity research analyst Chu Peng said the supermarket chain’s valuations appear stretched after a strong share price rally.

The outperformance is due to a combination of strong earnings visibility, defensive nature, market share gains from store expansion, and support from CDC cash handouts and EQDP flows, she said.

“While these drivers should continue into 2026, Sheng Siong Group’s valuations look demanding,” she added.

Lum Chang Creations (LCC) closed the week at 82.5 cents, 7.1 per cent higher than the previous week’s closing price of 77 cents.

The urban revitalisation specialist on Feb 13 received a nod from the Singapore Exchange for a transfer from the Catalist board to the mainboard.

LCC managing director Lim Thiam Hooi said that a mainboard listing will elevate the company’s corporate profile, enhance its visibility among institutional investors and provide a stronger platform for its next phase of growth in Singapore and the region.

The latest development came a day after the firm reported a net profit of $11 million for the first half of its 2026 financial year, up 104 per cent from $5.4 million in the year-ago period.

iFast shares fell 2.6 per cent to end the week at $9.39, from the previous week’s close of $9.64, despite strong earnings.

The digital bank and wealth management platform’s net profit rose 70.4 per cent to $32.9 million for the fourth quarter ended Dec 31, 2025, up from $19.3 million in the year-ago period.

In its research note on Feb 12, DBS reaffirmed its “buy” rating for iFast at an unchanged target price of $12.

What to look out for next week

Expect a short trading week as major Asian markets will be closed or operating on shortened hours for Chinese New Year Eve or Chinese New Year.

The market is currently digesting the Budget 2026 announcements delivered this week. Watch for continued reaction to the Government’s measures to boost local equities and attract new listings.

After DBS shares pulled back from their recent all-time highs following a profit miss, investors will be watching to see if the stock stabilises at the current levels or if the post-earnings correction deepens next week.

Non-oil domestic exports data for January 2026 will be released on Feb 16, with DBS chief economist Taimur Baig expecting a strong beat to the start of 2026.

“Electronics domestic shipments, which are supported by firm global artificial intelligence-related tailwinds, likely continued their outperformance against non-electronics,” he said.