Wall St’s AI concerns drag STI below 5,000

Date: February 16, 2026

• The STI crossed 5,000 but Wall St AI concerns meant it closed at 4,937.78
• Wall St pressured by AI “disruption hysteria’’, all indices closed lower
• DBS reported Q4 profit fall, shares came under pressure
• Sheng Siong shares fell after OCBC downgrade
• Singtel Q3 net profit up 43.5% at S$1.9 billion on exceptional gain from Airtel stake sale, shares cross S$5
• Starhub’s H2 profit down 51%: Citi downgraded the stock

 

A new all-time closing high of 5,016.76, banks and Singtel dominate turnover

After rising continuously between Monday and Thursday whilst gaining 82 points along the way and crossing 5,000, for the first time, the Straits Times Index succumbed to heavy selling pressure on Friday that dragged it 79 points down that was triggered by a large overnight slide on Wall Street.

The net outcome was the index’s gain for the week was reduced to only 3 points at 4,937.78, although perhaps more notably, it had reached a new all-time closing high of 5,016.76 on Thursday.

Average daily volume was elevated by heavy trading of the banks, Singtel, Keppel, SGX and ST Engineering, amounting to S$2.28b versus S$1.97b the previous week.

Friday’s turnover was the highest for the week at S$2.58b, of which S$1.08b or 47% came from trading of the three banks and Singtel alone.

Once again, AI concerns – or “disruption hysteria’’ – dogged Wall Street

The Nasdaq Composite led a broad market selloff on Thursday, as artificial intelligence (AI) fears re-emerged on Wall Street. The tech-heavy index sank 2% that day, the S&P 500 dropped 1.6%. The Dow Jones Industrial Average fell 663 points, or 1.3% to 49,451.

On Friday, tech stocks continued to get hit as Wall Street sold shares of firms spending big on AI. On the flip side, multiple industries have suffered panic selling amid worries that AI could disrupt everything from software to trucking.

“We believe that these initial reactions to the disruption story may turn out to be overblown, since many industries and individual businesses could very well turn out to be AI beneficiaries in the long term,” Daniel Skelly, head of Morgan Stanley’s wealth management market research and strategy team was quoted as saying in US newspaper Barron’s.

“Overall, with the S&P 500 flattish for the year, the bull market has certainly paused, and given way to a bull market in ‘disruption hysteria.’”

For the week, the S&P 500 lost 1.4%, while the tech-heavy Nasdaq Composite dipped 2.1%, and the blue-chip Dow Jones Industrial Average fell 1.2%.

DBS reported Q4 profit fall, shares came under pressure

DBS reported a 10% decline in Q4 net profit to S$2.26 billion last week, which if the S$100 million set aside for corporate social responsibility (CSR) commitments is excluded, would have resulted in net profit of S$2.36 billion, below the S$2.59 billion consensus forecast in a Bloomberg survey of six analysts.

Group net interest income was down 4% at S$3.59 billion, as net interest margin fell 22 basis points to 1.93% amid lower interest rates and a stronger Singdollar.

For the full year, net profit fell 3%  to S$10.93 billion, reflecting higher tax expenses from the consequential implementation of the 15% global minimum tax.

Excluding the S$100 million in CSR commitments, full-year net profit would have been S$11.03 billion, missing the S$11.27 billion consensus estimate in a Bloomberg survey of 15 analysts.

The results led to pressure on DBS’s shares, which dropped S$2.24 or 3.8% over the week to S$57.06.

In maintaining a “buy’’ on DBS, Maybank noted that DBS reiterated its commitment to capital return until financial year 2027.

“Only 12% of its S$3bn share buy-back mandate is complete so far. If not fulfilled by FY27E, we think there is potential for a special dividend, in order for DBS to keep its mandate. Even without this, DBS offers >5.5% yield in the medium term’’ said Maybank.

“Our new assumptions raise FY26E EPS (earnings per share) by 3%. Our multistage DDM (dividend discount model)…target price is raised to S$65.31 from S$62.79. Scale, balance sheet and macro tailwinds favour DBS’’.

Sheng Siong shares fell after OCBC downgrade

Shares of supermarket chain Sheng Siong came under pressure last week after OCBC Research downgraded the stock to a “hold’’.

OCBC equity research analyst Chu Peng said the group ended 2025 strongly, with its share price rising some 60% versus 23% for the STI.

She said: “The stock was among the top performers within the Singapore consumer companies under our coverage’’.

“We attribute Sheng Siong’s outperformance to a combination of strong earnings visibility, its defensive nature, market share gains from store expansion, and support from CDC cash handouts and Equity Market Development Programme (EQDP) flows’’.

She said Sheng Siong’s defensive strength remains intact, but its valuations appear stretched after the strong price rally.

She noted that the stock is currently trading at a 12-month forward price-to-earnings ratio of 24.8 times versus its historical average of 19.6 times.

Her fair value estimate for Sheng Siong is now S$2.77 versus $2.89 previously on a lower cost of equity assumption, pending further insights from the group’s 2025 results which are due on March 2.

Over the week, Sheng Siong’s shares lost S$0.22 or 7.6% at S$2.68.

Singtel Q3 net profit up 43.5% at S$1.9 billion on exceptional gain from Airtel stake sale, shares cross S$5

Singtel reported a 43.5% surge in net profit to S$1.9 billion for its third quarter ended Dec 31, 2025 thanks mainly to a higher exceptional gain of S$1.15b from Singtel’s partial sale of its stake in Airtel.

For Q3, its operating revenue inched up 0.9% to S$3.7 billion and underlying net profit for the three-month period climbed 9.5% to S$744 million amid strong results from its regional associates, Airtel and AIS.

Earnings before interest and tax grew 5.3%, driven by NCS and Optus offsetting weakness in Singtel Singapore.

For the nine months ended December 2025, the group recorded a net profit of S$5.3 billion, up 107.6%. The improvements came about despite operating revenue for the nine months falling 0.5% to S$10.57 billion.

Underlying net profit for the period rose 12.2% on the year to S$2.1 billion, net finance expenses rose 1.5% to S$258 million.

Over the week, Singtel’s shares peaked at S$5 on Thursday but ended the week at S$4.91. The nett gain for the five days was S$0.19 or 4%.

Starhub’s H2 profit down 51%: Citi downgraded the stock

StarHub reported net profit of S$38.5 million for its second half ended Dec 31, 2025, a 50.9% fall from 2024. H2 revenue stood at S$1.2 billion, down 3.1%.

This translated to an earnings per share (EPS) of S$0.019, down 55.3%.

On a full-year basis, StarHub’s net profit fell 46.2% to S$86.4 million, as the group was hit with a one-off S$14.1 million penalty for the return of spectrum rights and the absence of a provision utilisation from which it benefited in the year before.

Excluding the impact of the one-off penalty and provisions, the group’s full-year underlying net profit fell 29.1% to S$100.5 million.

Citi downgraded Starhub from “buy’’ to “neutral’’.

“We had originally envisioned robust earnings and dividend growth into financial years 2026 to 2028,” said Citi analysts Arthur Pineda and Luis Hilado, citing the telco’s S$70 million cost-cutting programme and prospects of “mobile market repair”.

However, those hopes dimmed after StarHub management lowered its earnings before interest, tax, depreciation and amortisation (EBITDA) guidance range by 20 to 25% to focus on “commercial flexibility”.

The telco also plans to ramp up capital expenditure to between 13 and 15% of total revenue, up from 6.7%  in FY2025.

Citi analysts described the spending hike as “unexpected” and slashed their profit forecasts for the next two years by 54 to 64%.

While the analysts believe the stock’s minimum-dividend payout of S$0.06 per share offers a “safety net” that prevents them from rating it a “sell”, they warned that the yield alone is not enough to drive the share price higher.

“We think the absence of earnings growth visibility in the near term would serve to anchor share price prospects,” they wrote. “The street will likely need to see proof of actual execution on earnings per share growth revival before revisiting the stock.”

Over the week, Starhub’s shares lost S$0.06 or 5% at S$1.13.