Banks continued to power the STI to new highs; Wall St becoming more concerned with AI spending

Date: July 27, 2026

• The Straits Times Index reached a new all-time closing high of 5,595.42 on Wed
• The net gain for the week was about 79 points or 1.43% at 5,588.34
• Wall St investors becoming more concerned about AI spending
• Market pricing in 35% chance of an interest rate hike this week
• STI’s total return for 2026 until 17 July is 21.2%: SGX Research
• Construction among Singapore’s top-performing sectors; up to S$53 billion demand forecast in 2026: SGX Research
• SingPost chairperson says talks with government ongoing in response to query about state aid
• SIA Engineering Q1 net profit down 6.1% at S$40.3 million
• EGP Energy launched its IPO of S$0.51 per share

 

Another week, another all-time high – thanks to the banks

The Straits Times Index continued its record-breaking run last week, reaching a new all-time closing high of 5,595.42 on Wednesday. Once again, the push came from the three banks, all of whom also continued to power to new highs.

A steep, Wall Street-influenced selloff on Thursday meant the index recorded a net gain of 79 points or 1.43% at 5,588.34 for the week.

 

Over on Wall St, major indices fell with tech in focus

Wall Street’s major averages saw a second week of losses tied to higher oil prices and struggling technology stocks after some of the biggest names reported earnings.

Some of the big tech stocks that posted earnings reports included Alphabet, Tesla, Intel, and International Business Machines among others.

Tesla was among the tech companies that saw big losses—dropping almost 18% last week—as tension in the Middle East and new imposed new tariffs drove a selloff. The company posted a miss in EPS and a beat in revenue.

In addition, Alphabet declined almost 10.5% last week despite an overall positive earnings report.

Crude oil futures dramatically rose 9.6% this week to settle around US$90.42 as of post-market Friday. Brent futures also jumped 11.6% to US$98.34 per barrel, after having surpassed US$100 mid-week.

 

Wall Street is becoming increasingly worried about AI capex

The selloff in Alphabet shares is the latest indication that Wall Street’s concerns about heavy artificial-intelligence spending are mounting, and it spells trouble for other tech companies as they report earnings.

Amazon, Microsoft, Meta and Alphabet are all dramatically raising their capital spending to build AI data centers. Investors are increasingly worried that the tech giants—which are all highly profitable companies in their core businesses—won’t bring in enough new AI revenue to justify hundreds of billions in capex.

Alphabet stock was pummeled after it announced higher-then-expected capital spending, and its tech brethren could face more of the same in the coming weeks.

The company’s management said on the earnings call Wednesday night that it now expects 2026 capex to be between US$195 billion and US$205 billion, compared with its prior guidance of US$180 billion to US$190 billion.

The spending also isn’t expected to slow down soon. Alphabet said it continues to expect capex to increase “significantly” in 2027.

Tesla, another member of the Magnificent Seven, reported on Wednesday night that its second-quarter capital spending rose to US$5.8 billion, up 142% from a year ago. The electric car maker expects capex to increase further in the second half of 2026 as the company works through its own AI and robotics ambitions. Tesla stock fell 15% on Thursday.

 

Market sees 35% chance of rate hike this week

As of Friday’s close, the futures market was pricing in a 35% chance that the US Federal Reserve will raise interest rates by 25 basis points at this week’s Open Markets Committee meeting.

 

STI’s total return for 2026 until 17 July is 21.2%: SGX Research

In a 20 July Market Update, SGX Research reported that the STI reached a record high of 5,561.42 on 15 July and, and delivered a 21.2% total return through 17 July, including an 18.6% price gain.

“As of 17 July, assets under management in STI ETFs had reached S$5.5 billion, approximately double the level of a year earlier, while Singapore equity ETFs are on track to record a 17th consecutive month of combined net inflows since the Equity Market Development Programme announcements in February 2025, with cumulative net inflows of S$1.6 billion’’ reported SGX Research.

It added that market flows also show how participation has broadened across STI constituents. – among STI constituents, the largest 2026 net institutional inflows through the 17 July close have been recorded by Singapore Airlines, United Overseas Bank (UOB), Wilmar International, Oversea-Chinese Banking Corporation (OCBC), and SATS.

 

Construction among Singapore’s top-performing sectors; up to S$53 billion demand forecast in 2026: SGX

Singapore’s construction sector grew 11.8% year on year in the first quarter of 2026, making it as one of the “strongest-performing sectors of the economy” and “ the fastest-growing major sector in Q1”, reported SGX Research in a 23 July Market Update, adding that advance estimates for the second quarter of 2026 indicate a further growth of 6.2%.

This continued expansion is supported by construction activity across both the public and private sectors, encompassing institutional, residential and industrial developments.

The construction sector’s growth is underpinned by elevated project demand. Following S$50.5 billion in construction demand in 2025, the Building and Construction Authority (BCA) expects between S$47 billion and S$53 billion in project awards for 2026.

Among the 20 largest Singapore-listed construction value chain stocks by market capitalisation, share prices have increased by an average of 56% over the past 12 months. Within the same group, the combined year-to-date average daily trading turnover increased by close to four times, SGX said.

The current cycle is also broader than traditional construction activity, SGX said. The pipeline spans airports, rail infrastructure, healthcare facilities, housing, utilities, commercial developments and digital infrastructure.

According to SGX data, the five strongest share price performers over the past 12 months across the local to international construction value chains were International Cement Group (+252.6%), GRC (+175.6%), Soilbuild Construction (+128.6%), Koh Brothers Eco Engineering (+100 per cent) and Huationg Global (+89.6%).

 

SingPost chairperson says talks with government ongoing in response to query about state aid

SingPost chairperson Teo Swee Lian said that the national postal service provider has been “talking to the government”, when asked about state aid for its loss-making postal business.

She was responding to a shareholder’s question at the group’s 34th annual general meeting (AGM) on Thursday (Jul 23) at Suntec Singapore.

Teo said that she was not at liberty to disclose the confidential discussions “until and unless the government has decided that it wants to reveal it”.

For FY2026 to March, SingPost’s revenue declined 23.1% on the year to S$376.1 million, from S$489.1 million. The lower top line was attributed to a 55.2% contraction in international revenue amid a volatile global macroeconomic environment, alongside the continued decline in letter mail volumes.

Net profit for the period was 75.2% lower on the year at S$60.9 million, from S$245.1 million. However, underlying net profit, which excludes aged trade payables and exceptional items, stood at S$10.7 million.

 

SIA Engineering Q1 net profit down 6.1% at S$40.3 million

Aircraft maintenance provider SIA Engineering reported a net profit of S$40.3 million for the first quarter ended Jun 30, down 6.1% from a year ago.

The group’s revenue for Q1 FY2027, at S$327.6 million, was 8.6% lower year on year due to lower revenue from materials, with a commensurate reduction in the cost of materials.

Excluding materials, however, revenue was up 4.2% year-on-year, the group said in a business update.

Group expenditure declined 11% to S$314.4 million due to lower material and repair costs.

Consequently, the group recorded an operating profit of S$13.2 million, an improvement of S$8.1 million from a year ago.

Earnings per share stood at S$0.036, down from S$0.0384 for the same period in FY2026.

 

EGP Energy launched its IPO of S$0.51 per share

Electrical infrastructure solutions and services provider EGP Energy Corporation launched its initial public offering on Tuesday, seeking to raise about S$30.6 million in gross proceeds ahead of its planned listing on the Singapore Exchange (SGX) mainboard.

The IPO comprises 18,823,500 offering shares priced at S$0.51 each. Of these, 17,823,500 shares will be offered through an international placement to institutional and other investors in Singapore, as well as selected institutional and other investors outside the US. The remaining 1,000,000 shares will be offered to the public in Singapore.

EGP Energy is set to become the fourth company to list on the SGX mainboard this year, following the listings of Foundation Healthcare, JustCo and UI Boustead REIT. UOB and UOB Kay Hian are the joint issue managers, while UOB Kay Hian is the sole bookrunner and underwriter for the IPO.

Including the IPO and the cornerstone tranche, EGP Energy expects to raise total gross proceeds of approximately S$30.6 million and net proceeds of about S$27.4 million.