Monthly Market Wrap: A new all-time closing high for the STI, in a month in which it gained 2.3%

Date: September 2, 2026

• STI’s total return for Aug was 3.4%: SGX Research
• Yangzijiang Shipbuilding the way with 22.5% surge: SGX Research
• Bank profits remain robust, boosted by wealth management
• Singtel’s Q1 underlying net profit up 21% to S$831m
• JP Morgan raised STI target to 7000
• Earnings turnarounds picking up pace: SGX Research
• Singapore factory output growth eases to 6.8% in July; electronics up 11.2%

 

The STI’s total return for August was 3.4%: SGX Research

The STI reached a record closing high of 5,754.17 on 11 August whilst for the month, the index gained about 127 points or 2.3% at 5,755.36, which according to SGX Research in a 1 Sep Market Update meant that total return was 3.4% including dividends.

In the same Market Update, SGX Research said August also produced stock-specific outliers, with Yangzijiang Shipbuilding leading STI constituents on record 1H26 net profit.

“Bumitama Agri and First Resources posted symmetrical 37% gains, while Medi Lifestyle’s 37% gain highlighted investor attention on corporate actions and improving liquidity despite weak underlying earnings’’ said SGX Research.

“Institutional flows rotated towards developers in August, with Hongkong Land, City Developments and UOL accounting for approximately 95% of the S$127 million improvement in Real Estate (ex-REITs) cumulative institutional net flows, while all three continued to trade below book value’’ it added.

On the performance of the STI, SGX Research said Bloomberg consensus target prices for the index increased from 5,884 at the end of July to 6,159 by the end of August, indicating that analysts were raising valuation expectations alongside the market’s advance.

“With indicative STI earnings growth remaining in the low double digits, investor attention has increasingly shifted towards identifying the companies best positioned to sustain earnings momentum and create shareholder value’’.

 

Yangzijiang Shipbuilding led STI constituents in August with a 22.5% rally

“This occurred alongside record 1H26 earnings, continued order-book growth and stronger analyst recognition. Revenue increased 36.2% YoY to US$1.75 billion while net profit attributable to shareholders rose 28.4% to RMB5.4 billion. The group’s outstanding order book stood at US$22.4 billion across 256 vessels at the end of July, providing earnings visibility through 2030. Bloomberg consensus target prices rose from S$4.55 at the end of July to S$5.16 by the end of August, while the proportion of buy recommendations increased from 83% to 92%’’ reported SGX Research.

 

Q2 bank profits: even though falling interest rates are squeezing margins, wealth-management, fee and other non-interest income more than compensated

DBS produced Q2 net profit of S$3.08 billion, up 9% year-on-year, a record. Total income rose 6% to a record S$6.09 billion. For 1H26, net profit reached a record S$6.01 billion, up 5%, with ROE at 17.5%.

The striking feature was how successfully DBS compensated for lower interest rates. Q2 net interest income fell 2% and net interest margin dropped 18 basis points to 1.87%, but net fee income jumped 25% to S$1.46 billion.

Wealth-management fees surged 42% to a record S$919 million, while wealth assets

under management exceeded S$500 billion for the first time. Loans grew 8% year-on-year. Asset quality remained excellent, with the non-performing loan ratio at 1.0%.

DBS declared a Q2 dividend of 81 cents per share.

OCBC arguably delivered the standout result. Q2 net profit rose 22% year-on-year to S$2.22 billion, taking 1H26 profit to a record S$4.19 billion, up 13%. First-half total income increased 11% to S$8.0 billion.

Like DBS, OCBC had to contend with margin compression, but its diversified business model paid off. Q2 non-interest income surged 51% to S$1.91 billion: fees rose 28%, trading income 85% and insurance income 68%.

First-half wealth-management income reached a record S$3.29 billion. Management raised its 2026 loan-growth forecast to high-single-digit to low-double-digit growth, versus its

previous mid-single-digit forecast.

The interim dividend was increased 15% to 47 cents per share, from 41cents last year.

UOB reported Q2 net profit of S$1.48 billion, up 10% year-on-year and 3% quarter-on-quarter. First-half net profit rose a more modest 3% to S$2.92 billion.

UOB also benefited from wealth management, with wealth income reaching a record S$717 million. Its ASEAN franchise continues to be an important differentiator, particularly Malaysia, Thailand, Indonesia and Vietnam.

However, there were some weaker points. Net interest income remained under pressure from lower rates, while UOB cut its 2026 fee-income growth guidance from high-single-digit growth to low-single-digit growth, citing delayed large deals and weaker-than-expected credit-card fees.

Trading and investment income declined 8% year-on-year.

The interim dividend was increased to 88 cents, from 85 cents previously.

 

Singtel’s Q1 underlying net profit up 21% to S$831m

Singtel reported a strong underlying performance for the first quarter ended 30 June 2026, with underlying net profit rising 21% to S$831 million, driven by improved contributions from Airtel, AIS, NCS, Optus and Digital InfraCo.

Group operating revenue increased 4.9% to S$3.56 billion, while EBITDA rose 8.7% and operating company EBIT grew 10% to S$462 million.

NCS performed particularly well, with EBIT increasing 29% to S$102 million, while Optus continued its recovery. Regional associates’ post-tax contributions rose 16% to S$543 million, led by Airtel and AIS.

However, Singtel Singapore remained under pressure from intense mobile price

competition, with revenue declining 3.1%.

Headline net profit fell 72% to S$818 million, largely because the previous corresponding quarter included substantial exceptional gains. Overall, the results indicate that Singtel’s underlying businesses and Singtel28 transformation strategy continue to gain momentum.

 

JP Morgan raised STI target to 7000

JPMorgan Chase & Co raised its target for Singapore stocks as robust economic growth and a narrowing valuation gap with developed-market peers bolster their outlook.

The Straits Times Index (STI) may climb up to 7,000 over the next 12 months in a bull case scenario, JPMorgan analysts including Khoi Vu wrote in a note.

“A Goldilocks economic backdrop should continue to underpin earnings per share growth and empower fiscal room,” the analysts said. “Strong yields, stable currency and the Equity Market Development Programme should enhance investor flows.”

Singapore’s Equity Market Development Programme provides grants to firms and individuals in the financial services sector to promote the Republic as a financial centre.

JPMorgan had raised its base case for the STI to 6,000 in January.

“While valuations have broken out of the averages, we believe this level will be sustained as the STI reprices closer to other developed markets driven by high yield and a stable currency,” JPMorgan analysts said.

Its top stock picks include DBS Group Holdings, Singapore Exchange, Keppel and UOL Group.

 

Earnings turnarounds picking up pace: SGX Research

In a 25 Aug Market Update titled “Turnarounds Add Breadth To Current Earnings Season’’, SGX Research said Singapore equities entered the second half from a position of strength, adding that the STI’s discount to Bloomberg consensus target price has narrowed materially from the double-digit levels that prevailed through much of the past few years, shifting the focus from valuation expansion to earnings delivery.

“Beyond the sector outlook, more than 20 SGX-listed companies have moved from comparable-period losses to profits in their latest announced results, spanning industrial, manufacturing, consumer, property-related and China-exposed companies’’.

“Ouhua Energy Holdings returned to profitability in 1H26, with attributable profit of RMB95.8million versus an attributable loss of RMB33.5 million in 1H25. The turnaround reflected stronger LPG margins as prices rose following Middle East-related supply disruptions, supported by lower-cost inventory secured before the conflict escalation’’ reported SGX Research.

It added that Food Empire Holdings also returned to profitability in 1H26, reporting attributable profit of US$35.4 million versus an attributable loss of US$1.5 million in 1H25.

“The turnaround was aided by the absence of the prior-period fair-value loss on its Renaissance Energy investment, while revenue also increased across regional markets’’.

Singapore’s factory output rose 6.8% year on year in July, moderating from June’s revised 7.5% growth, data from the Economic Development Board showed on Wednesday.

This was in line with expectations by private-sector economists who had similarly forecast a 6.8% expansion in a Bloomberg poll.

Excluding the volatile biomedical manufacturing cluster, output increased 8% year on year, slowing from June’s revised 9.9% expansion.

Among all manufacturing clusters, the linchpin electronics cluster posted the second-highest growth after precision engineering, with output rising 11.2% in July, down from June’s 21.1% growth.

Growth in the electronics cluster was led by infocomms and consumer electronics (51.7% and semiconductors (8%) on the back of sustained artificial intelligence-related demand.