The STI regained the 4,900 level on hopes that Iran war might end soon

Date: April 6, 2026

• Hopes Iran war might end soon lifted Wall St on Wed, STI rebounded 90 points
• Trump’s Wed speech failed to provide clarity on war, stocks fell
• Oil prices rebounded above US$100 a barrel
• OCBC rose to all-time high, market cap briefly above S$100b
• ST Engineering announced S$600m contract win; analysts mixed on outlook
• The STI recorded total return of 5.6% in 1Q 2026: SGX Research
• Singtel led share buybacks in 1Q: SGX Research

A large mid-week rally helped the STI bounce 90 points

On Tuesday 31^st March the US stock market marked its best day since May 2025 as the first quarter of 2026 wrapped up with renewed hope an end to the Iran war could come sooner rather than later.

The Dow Jones Industrial Average rose 1,125 points, or 2.5%. The S&P 500 rallied 2.9%. The Nasdaq Composite surged 3.8%. All three marked their best days since May 12, 2025.

The market spiked suddenly after reports about Iran’s president. Bloomberg, citing a report from IRNA, wrote that Iran’s President Masoud Pezeshkian told European Council President António Costa that Iran has “the necessary will to end this war.”

The report added Iran expects “the essential guarantees to prevent the recurrence of aggression” among other requirements.

The impact here of Wall St’s large rise was significant – led by large gains in the three banks, Singtel and SGX, the Straits Times Index bounced 90.38 points or 1.8% on Wednesday to regain the 4,900 level at 4,975.83.

Trump’s speech failed to provide clarity on when Iran war might end

The rally proved short-lived, with index dropping 28 points on Thursday after US President Donald Trump’s Wed address to the nation failed to give clarity on when the war might end and the Straits of Hormuz might reopen.

Despite this fall, the large jump on Wed was sufficient to enable the STI to record a 50-points or 1% rise to 4,947.5 – almost exactly the loss of the previous week.

Wed’s rebound was also large enough to ensure Wall St’s indices recorded gains for the week – the tech-heavy Nasdaq Composite popped 4.4%, while the S&P 500 jumped 3.3%, and the blue-chip Dow added 2.9%.

Oil prices rebounded

U.S. oil prices settled higher than international ones for the first time in nearly four years on Thursday, with West Texas Intermediate (WTI) settling at $111.54, up more than 11% after a volatile day, versus US$109.03 a barrel for Brent crude, an increase of 7.8% on the day.

The WTI benchmark hadn’t settled above Brent futures since May 18, 2022, according to Dow Jones Market Data. Just two weeks ago, WTI was trading at nearly a US$20 discount to Brent crude in intraday trading, but U.S. prices have closed the gap.

OCBC rose to all-time high, market cap briefly above S$100b

A record share price for OCBC has propelled the bank’s market capitalisation past the S$100 billion mark, making it one of only two Singapore-listed companies in the exclusive club, the other being DBS.

Shares of the bank rose as much as 3.1% on Wednesday (Apr 1), rising to a peak of S$22.65 in the first few minutes of trading, a price which put its market cap just above S$100b.

The counter later pared some of those gains to close at S$22.55 on volume of 9.5m, up 2.6% or S$0.58 from its Tuesday closing price. At this price, its market cap is just under S$94b.

Explaining the rally, Morningstar equity analyst Kathy Chan told The Business Times that OCBC’s shares appear to be “catching up” after underperforming DBS in 2025.

Its rebound has been supported by a “relatively resilient” banking sector despite macro uncertainties resulting from the Middle East conflict, she added.

Macquarie’s head of Asean equity research, Jayden Vantarakis, also named OCBC his top Singapore bank pick.

In a research note on Tuesday, he pointed out that OCBC had the best fourth-quarter results in the 2025 financial year among the three local banks.

OCBC in February reported that its Q4 net profit rose 3% to S$1.75 billion, up from S$1.69 billion in the year-ago period.

Meanwhile, UOB’s Q4 earnings fell 7% to S$1.4 billion; DBS reported a 10% drop to S$2.26 billion.

Vantarakis said that beyond OCBC’s strong earnings performance, its shift in capital management also gives a strong indication that it can maintain a 60 per cent profit payout this year.

Moreover, while all three local banks should benefit from wealth inflows, OCBC has a “strong starting point” on higher general allowances and non-performing asset (NPA) coverage expected for rising bad loans, he added.

Citi analysts, however, had a preference for DBS over OCBC. It nonetheless retains a “buy” rating on the latter.

In a note on Mar 18, Citi analysts flagged risks to wealth fee income, estimated at a 2% earnings impact for OCBC – compared to 1% for UOB and 3% for DBS – if equity sentiment softens.

ST Engineering announced S$600m contract win; analysts mixed on outlook

ST Engineering announced on Wednesday that its marine business has won a six-year subcontract valued at an estimated S$600 million from Abu Dhabi Ship Building (ADSB), a shipbuilder based in the United Arab Emirates.

The contract is for the design and supply of platform systems for a fleet of eight missile gun boats that ADSB is constructing for the Kuwait Naval Force.

DBS raised its target price for ST Engineering to S$12.40, from S$11 previously, flagging an “improving defence visibility and a higher-quality earnings mix”.

In a Wednesday note, it pointed to an “international defence inflection point emerging alongside already strong aerospace earnings momentum”.

“Commercial aerospace should continue to see strong earnings momentum, driven by extended asset utilisation and tight supply-demand conditions in MRO (maintenance, repair and overhaul), while defence is beginning to scale as international orders come through,” it added.

CGS International (CGSI), meanwhile, believes ST Engineering “was able to capture a higher value for the latest contract due to the expanded scope”, citing the scope of contract requirements.

“We believe this win reinforces ST Engineering’s growing presence in the Middle East,” it said on Thursday, further noting that the company won its first defence MRO contract – worth S$470 million – for the Qatar Emiri Land Forces in February.

However CGSI downgraded the stock from “add” to “hold”, deeming the stock fairly valued despite viewing its growing Middle East presence positively.

“We recommend investors take a breather amid potential de-escalation in Middle East tensions and rotate into other industrial names with more attractive risk-reward, said CGSI analysts Lim Siew Khee and Meghana Kande.

They added that ST Engineering, which is trading at a 30-times forecast price-to-earnings ratio for 2027, “largely prices in its 16 to 17 per cent earnings growth” for FY2026 and FY2027.

“It also represents a premium over larger defence peers’ 25-times (ratio),” they said, keeping their target price for the company at S$11.05.

The STI recorded total return of 5.6% in 1Q 2026: SGX Research

The STI rose 5.1% in 1Q26, lifting total return to 5.6% with dividends, according to an SGX Research Market Update last week. This outperformed both the FTSE APAC Index (+0.4%) and the FTSE World Index (-3.0%) in SGD terms.

“FTSE ST Mid & Small Cap and Next‑50 indices dipped slightly, while the Fledgling Index gained 2.5%. Performances were mostly sector‑led, with Technology (+17.9%) and Industrials (+11.7%) leading, continuing 2H25 momentum. Consumer Goods also firmed, up 13.6%. AEM, ST Engineering and Wilmar performances led these Sector Indices’’ reported SGX Research.

Singtel led share buybacks in 1Q: SGX Research

According to SGX Research, Singtel led the local market’s 1Q26 buyback consideration with 24.9 million shares acquired at an average price of S$4.95 (including trading/fees and clearing charges).

“The 21.2 million shares bought back in March were conducted under Singtel’s S$2 billion value realisation share buyback programme. Share buybacks from primary-listed companies in Singapore saw around S$560 million in combined consideration in 1Q26, up from around S$330 million in 1Q25’’.

“Other stocks that led the buyback consideration tally in 1Q26 included Oversea‑Chinese Banking Corporation, Keppel, United Overseas Bank, and Singapore Technologies Engineering’’.