Driven by the banks, the STI closed at a new all-time high of 5,801.96

Date: September 7, 2026

• Gains of 3-3.9% by the banks pushed the STI up 1.8%
• Strong US Aug jobs report boosted case for rate hike; Trump calls for rate cut
• Keppel DC Reit to buy two freehold data centres in Japan for US$1.1 billion
• Keppel DC REIT Placement To Lift 2026 Secondary Fundraising Above S$4b: SGX Research
• DBS analysts bet on S-REITs over bank dividends for yield
• 2026 Buyback Consideration Surpasses S$2 Billion: SGX Research
• Economists raise Singapore 2026 growth forecast to 5%; more see AI bubble as a top risk

 

The three banks last week drove the Straits Times Index to a new all-time high, above 5,800 for the first time ever, up 102 points or 1.8% at 5,801.96.

Over the week, DBS gained S$2.50 or 3.3% at S$78.65, OCBC jumped S$1.20 or 3.9% to S$32.27 and UOB gained S$1.23 or 3% to finish the week at S$42.01.

 

Strong US Aug jobs report boosted case for rate hike; Trump calls for rate cut

US President Donald Trump intensified pressure on the Federal Reserve to lower interest rates, threatening to cut off trade with certain economies which the US has a deficit if the central bank doesn’t act.

Trump issued his demands on Sept 4 in a lengthy social media post after a stronger-than-expected August jobs report which could bolster the case for Fed officials to raise rates at their next policy meeting starting Sept 15.

In his post, the president exhorted his hand-picked Fed chairman Kevin Warsh, whom he called “great,” and board members to “get smart” and “BE PATRIOTS for a change.”

US jobs growth unexpectedly surged in August, with non-farm payrolls adding 162,000 positions, and the unemployment rate held steady.

Investors boosted bets on a rate hike at the Fed’s upcoming meeting in response, sending stocks and short-dated bonds lower. In the futures market, the probability of a rate hike at the 16 Sep FOMC meeting rose from 50 to 60%.

For the week, the blue-chip Dow fell 0.27%, the benchmark S&P 500 added 0.09%, and the tech-heavy Nasdaq Composite pushed up 0.40%.

 

Keppel DC Reit to buy two freehold data centres in Japan for US$1.1 billion

Keppel DC Reit and Keppel said that they have indirectly agreed to collectively buy 90% stakes in two Tokyo data centres for about 171 billion yen (US$1.1 billion).

The two parties will thus jointly own nearly all of Tokyo Data Centre 4 and Tokyo Data Centre 5, which are freehold, hyperscale fully-fitted co-location data centres in Inzai City in Greater Tokyo.

Upon completion of the sale in the fourth quarter of 2026, Keppel DC Reit will hold an 88.62% effective interest in each data centre; Keppel, through its interest in Keppel Japan KK, will hold a 1.38% effective interest.

Loh Hwee Long, CEO of the manager of Keppel DC Reit, said: “In addition to immediate distribution per unit (DPU) accretion, Tokyo Data Centres 4 and 5 provide embedded growth through contracted rent escalators and meaningful potential reversion opportunities, while further deepening our exposure to the Japan data centre market.”

The Reit manager also plans to raise at least S$625 million through a private placement on Sep 10. DBS, OCBC, Jefferies Singapore and UOB were the joint bookrunners and underwriters for the private placement, which closed on Tuesday.

The issue price per new unit has been fixed at S$2.10. This is about a 4.4% discount to the volume-weighted average price of S$2.1974 of existing units’ trades on Monday.

A total of 297.6 million new units will be issued – up from the initially planned 280.1 million units.

In a 2 Sep report, Maybank said it has raised its our FY27 distribution per unit for Keppel DC REIT by 2.6% and target price to S$2.65 from S$2.60 whilst maintaining a “buy’’ on favourable sector dynamics.

 

Keppel DC REIT Deal To Lift 2026 Secondary Fundraising Above S$4b: SGX Research

In a 3 Sep Market Update, SGX Research said Keppel DC REIT’s placement is set to lift 2026 secondary equity fundraising by SGX-listed companies above S$4 billion, the highest annual total since 2021.

“This extends a trend that has seen secondary fundraising exceed IPO proceeds in Singapore over the past 10 years, with secondary fundraisings accounting for approximately 80% of total capital raised, reflecting sustained investor support for growth and expansion opportunities’’ reported SGX Research.

“While REITs have led secondary fundraising by value in 2026, the largest non-REIT company placements have been led by Hong Leong Asia, MoneyMax Financial Services, Marco Polo Marine, Aoxin Q & M Dental Group and Geo Energy Resources, showing continued use of placements across multiple sectors’’.

 

DBS analysts bet on S-REITs over bank dividends for yield

Investors hunting for dividend income may want to look beyond Singapore banks and towards real estate investment trusts (REITs), as the yield gap between the two sectors hits a multi-year high.

Singapore-listed Reits (S-Reits) yield about 6.2% in dividends on average, compared with around 4% for the trio of local banks. The difference of 2.2 percentage points between the two groups – known as the yield spread – exceeds levels seen from 2022 to 2024 during the interest rate hike cycle, said DBS Research Group in a note a 31 Aug note.

DBS’ analysts noted that S-Reits and banks are favoured as dividend plays among investors.

The banking sector, in particular, has hiked dividends since 2022 on the back of strong earnings from net interest margin expansion, a higher interest rate environment and a focus on shareholder return.

“(But) while banks historically outperformed in rising-rate environments… the backdrop today is different,” said the analysts.

For one thing, the strong price performance among Singapore banks has lowered their average dividend yield year to date.

On the other hand, the three-month compounded Singapore Overnight Rate Average has fallen from its peak of 3.7% to a range of 1.1 to 1.2%. This gives S-Reits a “still meaningful” earnings buffer as they refinance at lower benchmark rates.

DBS also expects S-Reits’ distributions per unit (DPUs) to grow about 3% on average for FY2026, further reinforcing the case for investors to allocate capital to such trusts.

DBS said it prefers office S-Reits the most, due to record-low Core Central Business District Grade A vacancy rate of 3.3% and a tight supply pipeline. Following this group are industrials, retail and hotels.

 

2026 Buyback Consideration Surpasses S$2 Billion: SGX Research

In a 2 Sep Market Update, SGX Research reported that 70+ SGX primary-listed companies in the eight months to end-Aug (8M26) have repurchased a combined S$2.09 billion of shares, up from S$1.57 billion in 8M25 and S$855 million in 8M24.

Singtel led the consideration tally in 8M26, accounting for S$948.6 million, or ~45% of aggregate buyback value. It maintains full execution of its S$2 billion buyback programme, on a pro-forma basis using FY26 underlying net profit, would result in a permanent c.3% accretion in underlying EPS and place Singtel on a higher EPS and DPS trajectory’’ said SGX Research.

“Seatrium repurchased S$8.0 million of shares in August under its S$100 million Share Buyback Programme. Following a further S$2.0 million purchase on 1 September, cumulative buybacks under the programme have reached approximately S$99.7 million since its launch in 2024, effectively fully deploying the programme’’.

 

Economists raise Singapore 2026 growth forecast to 5%; more see AI bubble as a top risk

Private-sector economists have raised their 2026 growth projections for the Republic to 5% from 3.5% previously.

The median forecast in the Monetary Authority of Singapore’s (MAS) latest quarterly survey of professional forecasters is close to the upper end of the official forecast range of 4.5-5.5%.

Most respondents in the September poll, released on Wednesday still see no immediate change in monetary policy – but expectations have shifted further towards tightening.

The latest upgrade was expected, economists said, noting that the authorities upgraded their own forecast range – which was previously 2 to 4%  – in August.

Singapore had reported a stronger-than-expected first-half performance, with gross domestic product climbing 5.9% in the second quarter, extending the 6.3 per cent growth recorded in the previous three months.

The Q2 number beat the median expectation of 4.3% in the previous survey. For Q3, economists expect the economy to expand 4.6%.

A prolonged or escalating Middle East conflict was cited as the top downside risk to Singapore’s economic outlook by 47.1% of respondents.

This was also the most-cited risk overall, flagged by 70.6% of respondents – though this was lower than the 85% in June.

The bursting of the AI bubble was the next most-cited risk (64.7%), followed by other geopolitical tensions such as trade tensions (41.2%).