Dear readers, in recent weeks, the Straits Times Index (STI), which is the benchmark indicator of the Singapore stocks markets reached its highest since 2007. As of last Friday (15 November 2024), the Straits Times Index was at 3,744.70.
At the same time, the Singapore stocks market community welcomes this year one of the most pivotal developments concerning the Singapore stock markets in recent years: that of the authorities here looking at ways to rejuvenate the Singapore stocks markets which many has said and commented as having languishing for years. I understand that review on the Singapore stocks markets is ongoing and with the measures to rejuvenate the Singapore stock markets to be announced successively.
This has me thinking: if the STI can reach 3,744.70 without the authorities’ intervention, then it seems to suggest that the bar to rejuvenate the Singapore stocks market seem to be set higher. And I also think that arising from the review on the Singapore stocks markets, maybe a target can be set for the STI, e.g. to reach a certain level by a certain timeline.
READ MORE >>> How Stock Markets have rebounded from the past?
If we set the STI at 5,000 that means that the STI will need to increase by at least 33% to reach this year and to me, this may not be the most ambitious.
However if we set the STI at 10,000, that means the STI will need to increase by about 167% and such a stretch target may well be meaningful and will motivate the authorities and community here to really look at ways to make the Singapore stocks markets more attractive.
Can 167% gain be achieved by the STI from its current level to reach 10,000? A first look may suggest that such a gain may be challenging. However, if we take a look at DBS stock, which has of last Friday is around $43 per share, the stock has in fact increased by some 510% times from its trading price of around $7 back in 2009 (notwithstanding 2009 is the year of financial meltdown but gain of DBS stock so far has been stellar), then there is a possibility.
READ MORE >>> The Laggards of Straits Times Index
However, it must be noted that the performance of the STI is driven mainly by the 3 banking stocks: DBS, OCBC and UOB and hence it means that for STI to go up to 10,000, DBS stock price has to go up by almost the same % to reach around $115 per share.
Call what I mentioned above as a hypothetical exercise, but I hope the authorities here can recognised as compared to other stock markets, the gain by the STI is not as stellar over the one or two decades. And it is hence time to be ambitious in this ongoing review of the Singapore stock markets, imagine if we may, to have a plan for a higher and ambitious STI target. Ultimately, the STI is a measure of the Singapore stocks markets.