SINGAPORE: “Finally,” netizens said after the Straits Times Index (STI) crossed the 4,000 mark for the first time on Friday (Mar 28). According to The Business Times, the STI hit a record 4,005.18 points just after the market opened, surpassing the previous day’s 3,991. ShareInvestor data showed that 24.9 million shares were traded by 9:02 a.m.
The Edge Singapore reported that the gains in the index were driven by DBS Group Holdings, Oversea-Chinese Banking Corporation (OCBC), ST Engineering, Singapore Exchange (SGX), CapitaLand Ascendas REIT, Keppel, and Wilmar.
While some celebrated, others questioned whether the rapid circulation of the index, crossing the 4,000 mark, was an attempt to “make people trade.”
One commenter said, “Almost half of the stocks are dead. Many thinking of delisting.” Another commenter remarked that he would rather “play elsewhere” as there were “many scandals with companies listed here (Singapore Exchange),” and the regulator’s approach was to “keep it undercover and not blow it up.”
“It’s propped up by the banks with the influx of foreign money; the rest of the market is in the doldrums, hardly moving an inch, if there are trades at all,” another added.
At 9:51 a.m., the index fell back to 3,981.75 after 238.6 million shares were traded. It later dropped to 3,972.43 by market close, with about 1.3 billion shares valued at S$1.3 billion exchanged.
On Feb 10, the index hit a record high of 3,912.38 just after the market opened after Singapore banks reached new levels.
SGX market strategist Geoff Howie noted that the STI’s climb to a record 4,005.18 was driven by stronger-than-usual gross domestic product (GDP) growth of 4.4% in 2024 and a cautiously optimistic outlook for 2025—a move that could signal positive sentiment for investors, added CMC Markets Singapore business development director Daphne Tan.
She also described crossing the 4,000 mark as a “key psychological milestone,” which could signal strong investor confidence, resilient blue-chip performance, and a favourable economic climate.
“Strong contributors in the STI include the banking and telecommunications sector. Breaking this level suggests a strengthening sentiment, but sustaining it would depend on global stability and market fundamentals,” she added, according to The Edge Singapore.
Commenting on the index’s new record, SGX highlighted that since its launch in 1966, the STI has delivered strong returns to investors, posting a total return of 40% over the past three years, a compound annual growth rate (CAGR) of 11.9%. The bourse operator added that the STI even outperformed the S&P 500, which recorded a total return of 31% and a CAGR of 9.4%.
Mr Howie pointed out that the benchmark index offers one of the highest dividend yields in the region. He added that Singapore’s three major banks—DBS, OCBC, and UOB—which make up over half of the index, play a significant role in achieving the 4.5% indicative yield, with financial services being a “cornerstone” of Singapore’s economy. /TISG
Read also: Singapore STI falls 2% as Asian markets slide on tariff and recession fears
Featured image by Depositphotos (for illustration purposes only)