Monthly Market Wrap: A 1.8% gain for the month as the STI crossed 5,000 for the first time but strike on Iran raises risks

Date: March 2, 2026

• The STI rose 1.8% to 4,995.07 in February after closing at a new high of 5,041.33 last Monday
• Did month-end “window dressing’’ help the STI rise sharply on Friday?
• Yangzijiang Shipbuilding was top index performer
• Meanwhile, Wall St continued to struggle with AI-related concerns
• Oil prices likely to surge after Iran strike, rate cuts now less likely
• UOB’s 4Q profit was down 7% to S$1.41b, full-year profit down 23%
• OCBC 4Q profit up 3% to S$1.75, beats forecasts but Maybank downgraded to “Hold’’
• SIA Q3 operating profit up 26% on record revenue; net earnings down 69% in absence of one-off gain
• Seatrium H2 profit up 48.3%; full-year profit doubles on stronger margins, oil and gas revenue
• UOL H2 profit rises 21% to S$276.2 million; special dividend proposed
• UI Boustead Reit lodged IPO prospectus, raising S$1.2 billion at S$0.88 per unit

 

A 1.8% rise in the STI for the month

Despite banks coming under pressure for the month – mostly likely due to slightly disappointing earnings – the Straits Times Index still managed to record a 90-points or 1.8% rise to 4,995.07 for January, which would surely please the bulls.

For the week however, the STI recorded a 22-points or 0.4% loss. On Monday it closed at a new all-time high of 5,041.33, having first crossed the 5,000 mark on 12 Feb.

Did month-end “window dressing’’ help the STI rise sharply on Friday?

There was a possible element of month-end “window dressing’’ on Friday that pushed the STI up about 31 points in heightened volume of S$3.24b – significantly more than the S$2.5b done on Thursday or S$2.3b traded on Wednesday.

Yangzijiang Shipbuilding was top index performer

A generous portion of the index’s rise on Friday was provided by a S$0.42 or 10.7% surge in the shares of Yangzijiang Shipbuilding that came in huge volume of 71m.

On Wednesday, Yangzijiang Shipbuilding reported a 24.6% rise in net profit to 4.5 billion yuan (S$827.4 million) for its second half ended Dec 31, which brought its FY2025 earnings to 8.6 billion yuan, 30.2% higher than the previous year’s 6.6 billion yuan.

Its revenue rose 15.8% on the year to 15.6 billion yuan for the half-year, and climbed 7.4% to 28.5 billion yuan for the full-year. The topline growth was fuelled by the progressive construction of vessels secured at higher newbuild prices.

CGSI in a Friday report maintained its “add” call for Yangzijiang Shipbuilding, citing the group’s earnings growth – backed by a US$22.4 billion orderbook – and an attractive nine times forward price-to-earnings ratio.

The brokerage raised its target price for the counter from S$4.51 to S$4.95, a premium of 14.1% above the stock’s Friday closing price.

CGSI analyst Lim Siew Khee noted that the shipbuilder’s final dividend of S$0.20 per share for FY2025, an increase from S$0.12 per share in FY2024, implies a 50% payout ratio which is a “positive surprise”.

Meanwhile, Wall St continued to struggle with AI-related concerns

On the flip side is the drag coming from Wall Street, where growing pressure on tech stocks because of concerns surrounding artificial intelligence and its impact on earning has meant a mainly weak month for the US market.

The Dow Jones Industrial Average fell sharply on Friday, but the index managed to eke out its tenth monthly gain in a row – but only just.

However the S&P 500 fell 0.5%, while the Nasdaq Composite dropped 0.9%, with both recording losses for the month.

For the week, the S&P 500 lost 0.4%, while the tech-heavy Nasdaq Composite dipped 1.0%, and the blue-chip Dow fell 1.3%.

Oil prices likely to rise after strike on Iran, US rate cuts now less likely

The US and Israeli strikes on Iran Saturday may jolt oil markets on Sunday evening. They could also dim the odds of Federal Reserve rate cuts this year.

Crude settled at US$72.87 a barrel before the attacks.

When trading resumes, prices are expected to rise as investors assess the risk to global supply, particularly through the Strait of Hormuz, which carries roughly one-fifth of the world’s oil and liquefied natural gas.

Oil is likely to move higher when Asian markets open, with investors likely shifting toward dollar-denominated assets in the early phase of the conflict.

After years of elevated inflation, another rise in oil prices will reinforce the perception that price pressures are becoming entrenched. If inflation stays around 3%, the dovish argument for cutting interest rates becomes harder to make.

UOB’s 4Q profit was down 7% to S$1.41b, full-year profit down 23%

UOB reported a 7% fall in fourth-quarter net profit as net interest income moderated amid margin headwinds. Earnings for the three months ended December were $1.41 billion, down from $1.52 billion a year ago. The figure missed analysts’ forecast of $1.44 billion in a Bloomberg poll.

In Q4 UOB’s net interest margin (NIM) – a key gauge of profitability – shrank to 1.84% from 2% a year earlier. Net interest income declined to $2.35 million from $2.45 million a year earlier.

For 2025, net profit was $4.7 billion, down 23% but beating a Bloomberg forecast of $4.64 billion.

UOB said the drop in earnings was largely due to the pre-emptive general allowances that the group proactively set aside in the third quarter to strengthen provision coverage amid growing macroeconomic uncertainties.

Allowances for credit and other losses more than quadrupled in the quarter to $1.36 billion.

NIM for 2025 slid to 1.89% from 2.03% a year ago. Net interest income dropped 3 per cent to $9.36 billion.

UOB recommended a final dividend of S$0.71 per ordinary share, down 23% from S$0.92 a year earlier, bringing the total 2025 payout to $1.56. Total 2024 payout, including special dividends of S$0.50, was $2.30.

UOB shares fell after the news, with the stock closing 4.12 per cent, or $1.60, down at $37.20. DBS closed 0.5 per cent lower at $57.86, while OCBC fell 1.2 per cent to $21.43.

OCBC 4Q profit up 3% to S$1.75, beats forecasts but Maybank downgraded to “Hold’’

OCBC Bank on Feb 25 reported a 3% rise in net profit for its fourth quarter ended 31 Dec 2025 to S$1.75b, better than the S$1.72 analysts had forecast in a Bloomberg poll.

OCBC’s net interest income in the fourth quarter fell 6% to $2.3 billion, as NIM – a key profitability gauge – fell to 1.86% from 2.15%  a year ago.

Non-interest income rose 37% to $1.32 billion, driven by strong broad-based growth across fee, trading and insurance income.

For 2025, net profit was 2% lower at $7.42 billion. Net interest income for the year fell 6% to $9.15 billion as asset yields fell faster than funding costs due to steep declines in key benchmark rates. NIM in 2025 fell to 1.91% from 2.2% in 2024.

The bank recommended a final dividend of S$0.42 and a special dividend of S$0.16 for 2025, as part of its previously announced capital return plan. The total payout for 2025 amounts to S$0.99 down from S$1.01 in 2024.

OCBC group chief executive Tan Teck Long, in his first earnings briefing since taking the helm in January, said that the bank will continue with its 50% ordinary dividend payout policy in 2026 and complete its $2.5 billion capital return plan by the year end.

In a 25 Feb report, Maybank downgraded OCBC to a “Hold’’.

“ OCBC’s new ‘Next Frontier’ strategy positions the Group towards ASEAN growth yet lacks visibility on deliverable targets, while the probability of excess capital returns to shareholders is falling. This would lower medium-term yields vs. FY25’’.

“Raise our target price to S$21.59, but D/G to HOLD from BUY while we await clarity on new strategy execution. We prefer DBS for strong yield visibility and scale-led momentum’’.

SIA Q3 operating profit up 26% on record revenue; net earnings down 69% in absence of one-off gain

Singapore Airlines’ (SIA’s) net profit for the third quarter ended December tumbled 68.9% to S$505 million due to the absence of a one-off, non-cash gain of S$1.1 billion booked in the year-ago period, following the disposal of Vistara airline after it merged with Air India in November 2024.

Operating profit for Q3 rose 25.9% to S$792 million on a record quarterly revenue of S$5.5 billion, which was up 5.5%.

Its share of losses from associated companies including Air India rocketed by S$163 million to S$178 million. This was because the group recognised a full-quarter share of the Indian airline’s losses this year compared with only one month the year before, SIA explained.

The group posted a 68.6% decline in net profit to S$743 million for the nine months ended December – despite revenue growing 3.2% to a record high of S$15.2 billion, and operating profit expanding 11.9% to S$1.6 billion.

Seatrium H2 profit up 48.3%; full-year profit doubles on stronger margins, oil and gas revenue

Offshore and marine group Seatrium reported a 48.3% rise in net profit to S$179.3 million for the second half of the year ended Dec 31, 2025 and a doubling in full-year net profit to S$323.6 million.

This was on the back of stronger margins, revenue growth in the oil and gas and offshore wind segments, as well as lower net finance costs.

With the strong performance, Seatrium proposed a final cash dividend of S$0.03 per share, payable on May 18 after the record date of May 6. This is double the previous year’s final dividend of S$0.015.

The company is “balancing re-investment for growth with consistent capital returns” to create value for shareholders, said its chief executive Chris Ong at an earnings briefing on Thursday.

It also plans to continue share buybacks under its existing S$100 million programme. This reflects “confidence in the business and in the momentum ahead”, said Ong.

UOL H2 profit rises 21% to S$276.2 million; special dividend proposed

Property player UOL last week reported a 21% rise in net profit to S$276.2 million for its second half ended Dec 31, 2025, on the back of an 11% increase in revenue to S$1.68 billion.

Earnings per share for H2 FY2025 stood at S$0.3268, compared with S$0.2696 for the same period a year earlier.

The board proposed a first and final dividend of S$0.18 a share and a special dividend of S$0.07 a share for FY2025. This brings the total dividend for the year to S$0.25 a share, up from the total dividend of S$0.18 a share for FY2024.

UI Boustead Reit lodges IPO prospectus, raising S$1.2 billion at S$0.88 per unit

UI Boustead Real Estate Investment Trust (Reit) lodged an initial public offering (IPO) prospectus last week as it seeks to raise S$1.2 billion at S$0.88 per unit.

Cornerstone investors in the Reit include Amova Asset Management, AMundi, JP Morgan Asset Management and Jumbo Group. Other notable names include Lian Beng chairman Ong Pang Aik and Boustead CEO Wong Fong Fui.

UI Boustead Reit’s initial portfolio will comprise 23 properties, including 21 leasehold properties in Singapore and two freehold properties in Japan. These have a total gross floor area of 5.9 million square feet and a net leasable area of 5.3 million sq ft. The Singapore properties include Razer’s headquarters here.

The Reit offers a distribution yield of 7.4% forecast for the two-month period from Feb 1 to Mar 31 on an annualised basis, and 7.8% projected for the year from Apr 1, 2026, to Mar 31, 2027.

UI Boustead Reit’s sponsor is UIB, which was formed through United Industrial’s acquisition of Boustead’s fund and property management business on Mar 12, 2025. The sponsor has total assets under management of about US$4 billion across 82 assets.