Record highs for the banks meant a new all-time high for the STI

Date: July 6, 2026

• The Straits Times Index rose 1% to a new all-time high 5,244.29
• All three banks closed at new highs, up 1.1-2%
• Average daily volume down to S$1.65b versus S$1.94b in previous week
• Maybank trimmed 2026 STI target to 5,500, said weak IPO debuts could dampen market
• Singapore Stocks Attracted S$600M+ in Net Institutional Inflow in June
• Top 240 small-to-mid caps averaged 13% total returns in 1H26
• Interest in SGX-listed small and mid-cap stocks returning, but analysts flag overvalued tech stocks
• SGX to roll out post-trade custody model, changes to bid mechanics in July, cut board lots in October

 

Record highs for the banks meant record high for the STI; daily turnover fell

All three banks rose to new all-time closing highs last week, thus enabling the Straits Times Index to gain about 53 points or 1% at a new record closing of 5,244.29.

Over the week, DBS gained S$1.33 or 2% at S$66.76, OCBC rose S$0.45 or 1.8% to S$25.31 and UOB added S$0.44 or 1.1% at S$40.24.

However average daily turnover fell sharply to S$1.65b versus S$1.94b the previous week and S$2.27b a fortnight earlier.

 

US stocks continued to march higher, less chance of a rate hike this month

Wall Street ended the holiday-shortened week higher as investors looked past softer-than-expected labour market data and reduced bets that the Federal Reserve will raise interest rates this year.

The June jobs report showed the U.S. added just 57,000 jobs, missing expectations, while the unemployment rate unexpectedly edged down to 4.2%.

Technology stocks, meanwhile, remained volatile during the week, with semiconductor shares under pressure as investors rotated into financials and other cyclical sectors.

For the week, the S&P 500 gained 2%, Dow Jones Industrial Average advanced 2%, and the Nasdaq Composite rose 2.5%.

As of Friday, the probability of a rate hike at this month’s Federal Open Markets Committee meeting stood at 22%, down from 33% a few days earlier.

 

Maybank trimmed 2026 STI target to 5,500, said weak IPO debuts could dampen market

Maybank has marginally lowered its 2026 year-end target for the Straits Times Index (STI) to 5,500 points, from about 5,600 previously.

This adjustment is in direct response to consensus downgrades in earnings per share estimates – lowered by 2% due to higher energy costs exacerbated by the US-Iran war, it said in a Tuesday report.

Maybank’s head of research Thilan Wickramasinghe said that rerating in the market this year will be driven by broader market liquidity, accelerating corporate artificial intelligence adoption and the allocation of about S$4 billion by the Equity Market Development Programme.

However, poor post-listing performance has plagued the market, he observed, with about 60% of IPOs launched on the Singapore Exchange over the past year currently trading below their opening prices.

Such sustained after-market weakness creates a “contamination risk” for future listings, he added.

While there is market optimism surrounding an expanding pipeline of 30 slated new listings, the current environment may force potential IPO candidates to either delay market debuts or shift listings to competing regional venues.

Wickramasinghe said that, if unaddressed, this contamination effect threatens to stifle secondary-market velocity by limiting the diversity of listed companies.

Maybank also noted that the earnings mix for Singapore’s banking sector is also undergoing a transition. Net interest income (NII) is no longer doing the heavy lifting to define bank stocks’ valuations, as lower benchmark rates have led to average NII declining by about 5% year on year.

However, this contraction is being offset by accelerating non-interest income, which rose about 7% year on year.

 

Singapore Stocks Attracted S$600M+ in Net Institutional Inflow in June

In a 1 July Market Update, SGX Research reported that Singapore stocks attracted S$611 million in net institutional inflow during June, reversing more than 40% of the cumulative net outflow recorded over the previous five months.

It also said that financial fervices led June institutional inflow with S$683 million in net buying and that while the net inflow reduced earlier net outflow, the sector still finished 1H26 with net institutional outflow of S$626 million, accounting for the bulk of the S$823 million in net institutional outflow over the past six months.

“This largely reflected significant net institutional outflow from DBS Group Holdings (DBS) earlier in the year. Ahead of its 1QFY26 results reported back on 30 April, Citi Research noted that DBS had experienced outsized institutional outflow and that a more constructive outlook could support some unwinding of those positions’’ reported SGX Research.

“DBS subsequently attracted S$739 million in net institutional inflow over May and June, reducing its 1H26 net institutional outflow to S$1.36 billion’’.

 

Top 240 small-to-mid caps averaged 13% total returns in 1H26

Ina separate 1 July report, SGX Research said the 240 Singapore small and mid-cap (SMID) stocks with market capitalisations ranging from S$100 million to S$10 billion as of 30 June generated a combined S$696 million in average daily turnover (ADT) in 1H26, while averaging 13% total returns.

“Institutional net buying was selective in 1H26, with technology and industrial stocks dominating the 40 companies that recorded the highest net institutional inflow relative to market cap.

The strongest inflows relative to size were recorded by AEM, Info-Tech Systems, Frencken, ISDN, Beng Kuang Marine, Aoxin Q & M Dental, and Nanofilm’’ reported SGX Research.

 

Interest in SGX-listed small and mid-cap stocks returning, but analysts flag overvalued tech stocks

Despite improved liquidity and valuations in the market, CGS International noted a “diverging performance” between large-cap and SMID stocks since the Middle East crisis broke in late February.

The macroeconomic uncertainty favoured “large-cap, high-beta stocks over the small-mid cap stocks that present a higher alpha”, CGSI said in a strategy note on Jun 24. It defines small companies as those with under US$2 billion in market cap.

CGSI added: “Easing oil prices suggest the global market is leaning into the ‘worst is over’ narrative in the Middle East crisis. However, the outperformance of large-cap stocks against small-mid cap stocks in Singapore, with preference for beta over alpha, suggests investors’ confidence has yet to return.”

CGS International noted that the tech rally was driven by a “structural reset in earnings expectations” as the demand for artificial intelligence is now “feeding directly into SGX-listed technology names rather than remaining a broad global semicon read-through”.

While CGSI sees reason to turn more constructive on the sector, analysts broadly acknowledged that valuations for some counters have been stretched above historical averages.

UOB Kay Hian addressed strong investor concern in a June retail webinar about “stretched tech valuations and IPO timing”, and cautioned against these valuations; it also expressed a preference for cheaper SMID-cap names with clearer earnings visibility.

 

SGX to roll out post-trade custody model, changes to bid mechanics in July, cut board lots in October

The Singapore Exchange (SGX) will allow depository agents to hold SGX-listed securities on behalf of clients in omnibus broker custody accounts from Jul 15, the bourse announced.

The adoption of broker custody accounts “continues to rise”, SGX noted.

It added that there were six such accounts opened for every direct account opened with the Central Depository (CDP) from October 2024 to April 2026.

An omnibus broker custody account combines the assets and trades of multiple customers under a single broker.

“This change aligns Singapore’s custody structure with global practice and is expected to make Singapore more attractive for international intermediaries and provide investors with more choices,” SGX said.

SGX will reduce its standard board lot size from Oct 5, from 100 units to 10 units for instruments priced above S$10 and up to S$100.

For instruments priced above S$100, board lot sizes will be cut from 100 units to one unit.

The initial reduction will take place for 11 stocks priced above S$10, which accounted for 35% of trading activity in the first six months of this year, SGX said.

In addition, from Jul 15, the minimum bid sizes for Hong Kong dollar, renminbi and yen-denominated securities contracts listed on SGX will “no longer be aligned with those in their home markets”.

SGX said it will communicate changes to the minimum bid size to members in advance by way of a circular.

These changes follow public consultations, where the proposals received broad support from market participants, it added.