Banks continued their upward march, STI at a new all-time high with penny stocks in play

Date: January 19, 2026

• The STI gained 105 points or 2.2% to reach a new high of 4,849.1
• Trading was also marked by heavy rotational punting of pennies
• On Wall Street, software stocks were hit because of AI worries
• DBS, OCBC at all-time highs, UOB catching up
• STI to reach 5,600 this year: Maybank
• Retail Logged S$2.6B of Net Buying in 2025 as Flows Concentrated in Banks: SGX Research
• Latest Catalist IPOs – Toku at S$0.25 per share and The Assembly Place at S$0.23 per share

 

Banks and penny stocks in play as STI rose to a new high

Large gains in the three banks last week propelled the Straits Times Index up 105 points or 2.2% to a new all-time closing high of 4,849.1. Average daily volume amounted to S$1.5b versus S$1.61b the previous week.

Trading was also marked by heavy rotational punting of penny stocks. On Monday for instance, Charisma Energy and Leong Guan jumped almost 30% and 13% respectively in high volume, on Tuesday Figtree rose 29% and on Wednesday action was focused on Mencast, The Place and Netpac, all of which rose between 11-33%.

On Wall Street, software stocks were hit on AI concerns, silver continued its rally

A rotation away from large technology stocks dragged down the major indexes – on Wednesday the Nasdaq Composite fell 1% whilst the bulk of the so-called Magnificent Seven stocks were down 2% or more. Alphabet and Apple were more mixed, while Microsoft, Tesla, Amazon and Meta Platforms fell sharply.

“Software is sucking wind,” Jefferies software analyst Brent Thill told US newspaper Barron’s. “People are just like, ‘I can’t take the pain anymore.’”

The brewing narrative is that artificial-intelligence coding tools will drain the moats that software companies have worked so hard to fill over the past decades. AI coders are already providing advanced capabilities, and they will only improve with time.

Investors are therefore betting that at some point companies will be able to make their own customized versions of these applications at a lower cost, bypassing software subscriptions.

Wall Street closed the trading week modestly lower, with the S&P 500 remaining within striking distance of the historic 7,000 level. Investor attention also focused on key inflation data, the kickoff of earnings season, and the ongoing rally in silver which climbed more than 11% for the week.

The precious metal was supported by softer U.S. inflation data that reinforced expectations for Federal Reserve rate cuts, alongside geopolitical uncertainties, strong industrial and investment demand, and tightening supply conditions.

For the week, the S&P lost 0.4%, while the tech-heavy Nasdaq Composite dipped 0.7%, and the blue-chip Dow fell 0.3%.

DBS, OCBC at all-time highs, UOB catching up

Over the five days DBS jumped S$1.52 or 2.6% to a new high of S$59.12 and OCBC gained S$0.64 or 3.2% to close at a record S$20.44.

UOB in the meantime, rose S$0.72 or 2% to S$36.74, still below its all-time closing high of S$38.67 reached 10 March 2025.

The Straits Times quoted an RHB analyst saying investors are flocking to safer, more stable assets such as the local banks amid economic uncertainty, among other factors.

The analyst noted: “We believe a combination of factors such as the flight to quality Singdollar assets, attractive dividend yields, falling risk-free rate and the sector as a potential beneficiary of equity market reforms have helped underpin the sector’s performance’’.

Morningstar director of Asia equity research Lorraine Tan was quoted saying quality companies with attractive dividend yields are seen as a proxy to holding Singapore government bonds as interest rates are expected to fall.

She added there is no doubt the banks’ dividend yields, which are around 5%, are attractive at this stage. DBS and OCBC could increase dividends on the back of steady earnings, she noted.

Analysts also noted that investors are waiting out for higher dividends from OCBC. CGS International (CGSI) research analyst Tay Wee Kuang said OCBC’s share price outperformance is likely due to investors holding out for second-half 2025 dividends.

“OCBC’s 50% payout in the first half means their committed 60% payout ratio for the financial year of 2025 will be more backloaded into the second half,” he said.

STI to reach 5,600 this year: Maybank

In a 12 Jan report, Maybank said Singapore offers a rare combination of macro resilience, structural reforms and valuation support and that the market’s value proposition is fundamentally more appealing than the previous bull run 17 years ago.

“With its peers exhibiting far more volatility from a policy and geopolitical standpoint, we believe Singapore’s ‘certainty premium’ should widen going forward. We forecast this should propel the STI to 5,600 this year’’ said Maybank as it offered three reasons.

“First, this includes hastening large-cap reforms driving faster capital returns through higher dividends and share buybacks. Second, we expect valuations of small-and-midcaps to expand as MAS’ value up reforms are implemented.’’

“In North Asia where reforms are at advance stages, markets have re-rated on average 40%. Third, Singapore is leading the region in AI. We think this year AI use-cases should start to show up in improved margins and earnings’’.

Maybank’s top picks are CICT, Coliwoo, CSE, Food Empire, LREIT, OCBC, Sea, SGX, Starhub and Suntec REIT.

Retail Logged S$2.6B of Net Buying in 2025 as Flows Concentrated in Banks: SGX Research

In a 14 Jan Market Update, SGX research said that in 1H25, retail investors recorded S$2.2 billion in net retail inflows into Singapore stocks, followed by a further S$413 million in 2H25 and that DBS was the largest recipient of net retail inflows, with nearly half of the full‑year net inflow concentrated in the two weeks following Tariff Liberation Day in April.

“Among STI stocks, Mapletree Industrial Trust recorded the highest net retail inflow as a share of market cap for the year at 6.6%. Across the iEdge Next 50, NTT DC REIT likewise registered net retail inflows amounting to 6.6% of its market cap, with the latter also seeing some instances of range‑bound trading in 2H25’’ reported SGX Research.

“From April 10 to end‑2025, retail investors unwound S$350 million of CDL—reversing more than 18 months of earlier net buying that totalled S$354 million, which coincided with a VWAP (volume weighted average price) of S$5.52—while the subsequent VWAP rose to S$6.37; the trend continued into early 2026, with a further S$58 million sold at a VWAP of S$8.60’’.

Latest Catalist IPOs – Toku at S$0.25 per share and The Assembly Place at S$0.23 per share

Customer experience firm Toku will be offering 65 million shares at S$0.25 per share, comprising 63 million placement shares and two million public offer shares with a market capitalisation of S$142.6 million post-listing on Catalist.

The company will raise net proceeds of S$13.7 million, which will be used for expansion of its artificial intelligence-powered customer experience platform, tech development and potential mergers and acquisitions as well as general working capital.

Toku helps companies glean insights from its customers across channels such as voice, chat and e-mail, with its AI being able to transcribe, summarise and analyse conversations for sentiment.

Expanding into new geographies has driven revenue growth for Toku, with revenue growing each year from US$21.6 million in FY2022 to US$28.8 million in FY2023 to US$31.8 million in FY2024.

While losses also grew in tandem with the revenue growth, from US$4 million in FY2022 to US$4.5 million in FY2023 and US$5.3 million in FY2024, the company is already looking at efficiency gains to bring costs down.

Losses for the first half of 2025 were lower at US$1.3 million compared with the first half of 2024 at US$5.5 million.

Applications for Toku’s shares will close at noon on Jan 20, and trading will begin when the market opens on Jan 22.

Also last week, co-living operator The Assembly Place (TAP) launched its initial public offering (IPO) of about 50.3 million shares at S$0.23 each on Catalist, with trading expected to start on Catalist on Jan 23.

The company registered its prospectus on Thursday, offering a public tranche of two million shares. About 48.3 million are being offered as placement shares, which include around 10.6 million invitation shares reserved for subscription and/or purchase by the group’s management, directors and employees, as well as business associates.

Following the offering, TAP will have a share capital of about 383 million shares, giving the company an estimated market capitalisation of S$88.1 million.

It expects to raise gross proceeds of about S$18.3 million from the IPO offering and issuance of cornerstone shares.