Monthly Market Wrap: Banks Led STI to Unprecedented Highs above 5,700

Date: August 3, 2026

• The STI gained almost 9% over the month, closing at a new high of 5,713.19 on 29 July thanks mainly to the banks
• For the week, the index’s gain was 0.7% at 5,628.50
• Chipmakers came under pressure on AI spending concerns
• US tech stocks faced headwinds, concerns surround AI spending, revenue
• US indices rose for the week after Fed held rates steady
• SIA sank into the red with S$76 million Q1 loss as fuel costs jump; analysts mixed in their recommendations
• Keppel H1 net profit fell 59% to S$154.7 million on rig impairments, M1 deal fallout
• Foundation Healthcare’s Disappointing Debut but EGP Energy did well
• Singtel in talks for Optus stake sale reportedly worth US$1.4b
• Collapse of Simba-M1 merger a major factor depressing Singtel’s shares

 

New high for the STI above 5,700

July will be remembered as one of the defining months in the history of the Singapore stock market. In an extraordinary display of momentum, the Straits Times Index (STI) swept through the 5,200, 5,300, 5,400, 5,500, 5,600 and 5,700 milestones within the space of a few weeks, extending what has become one of the strongest bull runs the local market has witnessed in decades.

By the end of the month, Singapore had firmly established itself as one of the world’s best-performing developed equity markets with the Straits Times Index gaining about 458 points or 8.9% at 5,628.5 after earlier achieving a new all-time closing high of 5,713.19 on Wednesday.

What was particularly striking was not just the magnitude of the gains, but the speed with which new records were set. Investors who only a year ago questioned whether the STI could sustain a move above 5,000 were instead witnessing a succession of fresh all-time highs.

However, towards the end of the month, banks, Singtel and a handful of other blue chips and therefore the STI did encounter some pressure. On Thursday the index dropped below the 5,700 level when it lost about 40 points and on Friday, the loss was a further 45 points.

As a result, the gain for the final week of July was limited to 40 points or 0.7%.

 

The Banks Remain the Market’s Driving Force

The rally was driven overwhelmingly by Singapore’s three banking giants. DBS crossed the S$70 mark for the first time and closing at a new high of S$75 on Wednesday last week, cementing its status as the country’s largest listed company. OCBC moved within touching distance of S$30 at S$29.78 while UOB traded comfortably above S$40 at a Wed high of S$43.89.

Their combined weighting in the STI meant that every incremental gain translated into fresh record highs for the benchmark index. Quite simply, the banks have become the engine powering Singapore’s equity market.

 

Chipmakers came under pressure on AI spending concerns

South Korea’s stock market came under immense pressure on Tuesday, as it plunged almost 10% after a global selloff in tech stocks pushed companies like SK Hynix and Samsung deep in the red. The country’s KOSPI index plunged to its worst session since March.

Deutsche Bank strategist Jim Reid said renewed concerns over Al investment spending and competition from lower-cost Chinese companies were “the dominant driver” of Asian markets, triggering another selloff in global semiconductor stocks.

Here, tech leaders also plunged in response – on Tuesday AEM lost 8.5%, UMS dropped 8.5% and Frencken slid 8.9%.

 

US tech stocks face headwinds, concerns surround AI spending, revenue

Apple stock dropped like a rock on Thursday after the company offered disappointing revenue guidance, citing foreign exchange and supply chain headwinds.

During the company’s earnings call, Apple said it expects September quarter total company revenue to grow between 9% and 11% from the prior year. The midpoint of that is about US$113 billion, below analyst estimates of US$114.9 billion.

Shares were down 8.3% after guidance update, extending the stock’s post-earnings losses.

Apple faced a very high bar in reporting its results. The stock is up 23% this year and 65% over the past 12 months.

 

Wall St stocks rose for the week after Fed held rates steady

The Federal Reserve held its key interest rate at 3.5-3.75% for the fifth straight meeting on Wednesday. Also, three FOMC members dissented, all preferring a 25-basis-point hike.

For the week, the S&P 500 advanced 1.05%, while the tech-heavy Nasdaq Composite climbed 1.59%, and the blue-chip Dow added 1.04%.

 

SIA sank into the red with S$76 million Q1 loss as fuel costs jump; analysts mixed in their recommendations

Singapore Airlines sank into the red with a net loss of S$76 million for its first quarter ended Jun 30, 2026, compared with a net profit of S$186 million in the previous corresponding period.

This was mainly due to a lower operating profit from a sharp 78.5% jump in net fuel costs triggered by the Middle East conflict, as well as a higher share of losses from Air India.

Revenue for Q1 rose 19.3% to a record S$5.7 billion because of strong demand for travel, sending passenger revenue up 18.6% to S$4.6 billion; passenger yields rose 12 per cent, and cargo revenue, by 33.5%.

DBS Group Research was critical on Wednesday (Jul 29), noting in a report that the group’s Q1 results fell well below expectations.

SIA’s operating profit came in at S$106 million, plunging 73.8% year on year, significantly missing DBS’ estimate of S$244 million and consensus estimates of around S$282 million.

The research house said that before the results, positive profit guidance from close regional peers such as Cathay Pacific and Korean Air had pointed to a resilient operating backdrop.

DBS expects a negative share price reaction, arguing the stock had already priced in a stronger operating performance. The brokerage maintained a “hold” call and a S$6.50 target price versus Friday’s closing of S$7.70.

OCBC Group Research, which raised its fair value estimate to S$6.95 from S$6.65 while retaining a “hold” rating, on Thursday noted that SIA was in a relatively stronger position than its peers to withstand the impact of the Iran conflict.

This was aided by an effective hedging programme partially pegged to the Mean of Platts Singapore – the average of a set of Singapore-based oil product price assessments published by Platts.

Citi maintained a S$7.58 target price, citing successful commercial collaborations and the stickiness of a rising trend towards premium quality that could divert hub traffic away from the Middle East.

 

Keppel H1 net profit fell 59% to S$154.7 million on rig impairments, M1 deal fallout

Asset manager and operator Keppel last week reported a 59% drop in overall net profit to S$154.7 million for the first half ended Jun 30.

The group’s results were dragged down by a S$375 million net loss in its non-core portfolio that is slated for divestment. This included S$165 million in impairments on 13 legacy rig assets, in addition to interest costs tied to these rigs.

Depreciation and amortisation adjustments following the termination of the M1-Simba merger in May also contributed to a net loss of S$65 million.

There was also a S$32 million net loss from property-related non-core assets, mainly from operating losses on investment properties and fair value loss on investments.

Keppel declared an interim cash dividend of S$0.15 a share for H1 2026, unchanged from a year earlier. It is also continuing its S$500 million share buyback programme, having repurchased 34.2 million shares for a total of S$356 million since July 2025.

 

Foundation Healthcare’s Disappointing Debut but EGP Energy did well

Foundation Healthcare’s initial public offering (IPO) of shares priced at S$0.76 each was 3.8 times subscribed; however, the stock ended its first trading day at S$0.70, 7.9% below the IPO price of S$0.76. It finished the month at S$0.74.

In contrast, shares of electrical infrastructure solutions and service provider EGP Energy Corp closed its debut last week at S$0.62, 21.6% above its S$0.51 IPO price.

After the end of its first trading day, the group also announced its first project win, valued at around S$1.1 million, via its wholly owned subsidiary EGP Smart Energy.

With this, the group’s order book has been lifted to S$302.4 million to date.

EGP Energy is the fourth company to list on the SGX mainboard this year, following the listings of Foundation Healthcare, JustCo and UI Boustead REIT.

It now has an issued share capital of nearly 225.5 million shares, with a market capitalisation of about S$115 million based on the offering price.

 

Singtel in talks for Optus stake sale reportedly worth US$1.4b

Singtel said on Thursday it is in discussions with “interested parties” to sell a stake in its wholly owned Australian unit Optus, though the telco cautioned investors that a transaction is far from guaranteed.

This comes after the Australian Financial Review (AFR) on Wednesday reported that New Zealand-based infrastructure investor Morrison was in talks to buy a minority stake valued at more than A$2 billion (US$1.4 billion).

Morrison has also secured a seven-week exclusivity period to finalise the potential purchase of a more than 30 per cent stake in Optus, added AFR.

On Friday, Singtel’s shares dropped S$0.14 to S$4.44. For the month they gained S0.03 whilst for the week they were up S$0.05.

 

Collapse of Simba-M1 merger a major factor depressing Singtel’s shares

Singtel cited the collapse of the proposed merger between Simba and M1, which ended short-term hopes of consolidation in Singapore’s competitive telecommunications market, as a key factor weighing on its share price and investor sentiment.

The shares traded at S$5.20 on 20 March, which means that of Friday’s S$4.44 close, the stock is down S$0.76 or 14.6%.

Chief financial officer Arthur Lang at the telco’s Annual General Meeting last week said expectations of a consolidation were high and most observers believed a merger between the third- and fourth-largest telcos would have benefited the industry.

However, the deal was called off on May 21, the same day Singtel announced its results for FY2026, implying a continuation of the status quo: low profitability in a highly saturated market.

Lang added that the Middle East conflict has also had an impact on Singtel’s share price even though the telco was not directly exposed to the crisis, as the company could still be affected through its overseas businesses.

These factors are out of Singtel’s control, he said, but the company is taking cost-management measures to mitigate the pressures from rising external costs and inflation.