Singtel, ST Engineering, Keppel and Sembcorp Industries could offer investors four different growth stories beyond Singapore’s dominant banks. But can these blue chips deliver the earnings growth needed to help lead the market’s next phase?
For much of 2026, Singapore’s stock market has had three powerful engines: DBS, OCBC and UOB.
The three banking giants have helped drive the Straits Times Index (STI) higher, rewarding investors who stayed invested in Singapore’s financial heavyweights. But their dominance has also created a potential vulnerability.
What happens when the banks stop climbing?
Singapore investors received a sharp reminder of that risk in October. On 8 October 2026, the STI fell 3.5% in a single session, with DBS, OCBC and UOB among the stocks under pressure. The sell-off raised an important question: after such a strong rally, can the Singapore market maintain its momentum if its biggest constituents struggle?
The answer may depend partly on what happens beyond the banking sector.
Enter the STI Avengers: four Singapore-listed companies with different potential growth engines.
- Singtel: Digital infrastructure and business transformation.
- ST Engineering: Defence, aerospace and engineering demand.
- Keppel: Infrastructure, connectivity and asset management.
- Sembcorp Industries: Power generation and the energy transition.
These are not four guaranteed winners. Nor can their share-price gains necessarily offset a sustained decline in the banks.
But they provide a useful framework for examining a bigger question: could Singapore’s market leadership broaden beyond its traditional banking giants?
1. Singapore’s STI Has a Concentration Problem
The STI tracks 30 of Singapore’s largest listed companies. However, the index is not an equal-weighted representation of the local economy.
Its largest constituents exert a disproportionate influence on its performance.
As at 30 September 2026, the three banks accounted for approximately 59% of the SPDR Straits Times Index ETF’s holdings. DBS alone represented nearly 30%, while OCBC and UOB contributed approximately 19.5% and 9.8%, respectively.
That is an extraordinary concentration in just three companies.
It also helps explain why movements in the banks can have such a powerful effect on investors’ perception of the wider Singapore market.
When the banks rally, they can lift the index even if other stocks are delivering more modest returns. When the banks fall sharply, the reverse can happen.
This creates an important distinction between the performance of the STI and the performance of Singapore’s broader corporate sector.
A falling index does not necessarily mean that every Singapore-listed company is experiencing deteriorating business conditions. Likewise, a rising index does not mean that opportunities are equally attractive across the market.
For investors, the question is whether other constituents can generate sufficient earnings growth and shareholder returns to broaden the market’s leadership.
That is where our four Avengers come in.
2. Singtel: Can Digital Infrastructure Become Its Next Growth Engine?
Singtel is no longer simply a story about mobile subscriptions and telecommunications services.
The group has been reshaping its business around digital infrastructure, data centres and its regional associate investments. These businesses give investors exposure to areas of the economy that may benefit from growing demand for connectivity, computing capacity and digital services.
The investment case rests on whether this transformation can deliver sustainable earnings and cash-flow growth.
The opportunity: More than a traditional telecoms business
Data centres have become strategically important as businesses expand their use of cloud computing and artificial intelligence.
Singapore’s limited land availability, energy requirements and regulatory environment make the development of digital infrastructure a complex undertaking. Regional expansion can therefore be an important part of the investment equation.
For Singtel, the attraction is the possibility of building additional value from its digital infrastructure ambitions while continuing to benefit from its established telecommunications operations and regional associates.
A successful transformation could change how investors assess the group.
Instead of valuing Singtel primarily as a mature telecommunications operator, the market might place greater emphasis on its infrastructure assets, growth opportunities and ability to generate cash from a diversified portfolio.
That would potentially give the stock a different role in the STI.
The risk: A compelling story can become an expensive stock
Investors should not assume that exposure to data centres automatically translates into superior returns.
Infrastructure requires capital. Projects must secure customers, manage operating costs and generate returns that justify the investment.
Singtel also has to balance growth investment against dividends, capital allocation and the performance of its established businesses.
Its regional associates can contribute significantly to earnings, but their performance and distributions are not entirely within Singtel’s control.
The key question is whether future earnings and cash flow can justify the valuation investors are paying today.
What to watch: Growth in digital infrastructure, profitability across the group, contributions from regional associates, capital expenditure and free cash flow.
The STI Avengers verdict: Singtel offers a potential digital-infrastructure growth story, but investors need evidence that its transformation is translating into financial results rather than simply a more attractive corporate narrative.
3. ST Engineering: Can Defence and Aerospace Deliver the Earnings?
ST Engineering offers a different investment proposition.
While Singtel’s story revolves around connectivity and digital infrastructure, ST Engineering has exposure to defence, aerospace and engineering services.
These businesses can benefit from different sources of demand, including defence procurement, aircraft maintenance and the need to keep complex industrial systems operating.
For investors concerned about excessive dependence on the banks, that diversification is worth examining.
The opportunity: Demand backed by long-term requirements
Defence spending is influenced by national security priorities and procurement cycles. Aerospace maintenance and repair services, meanwhile, benefit from the need to maintain aircraft throughout their operating lives.
These activities can create opportunities for recurring work and multi-year contracts.
A substantial order book can also provide a degree of visibility into future revenue, although orders do not automatically translate into profits at the expected pace or margin.
The important issue is execution.
Can ST Engineering convert its contracts into revenue, protect margins and generate sufficient cash flow to support further investment and shareholder distributions?
If it can, the company may offer an earnings-growth profile that differs from the interest-rate-sensitive earnings drivers of banks.
The risk: Growth expectations may already be reflected in the share price
A strong business does not necessarily make a stock attractive at every valuation.
If investors have already priced in robust defence demand, continued aerospace growth and reliable execution, even good financial results might disappoint the market if they fall short of expectations.
Investors also need to consider labour costs, project execution, contract profitability and the timing of revenue recognition.
Order-book growth is useful, but it should be assessed alongside margins, cash conversion and the quality of the underlying contracts.
What to watch: Order intake, order-book conversion, aerospace services growth, operating margins, cash flow and valuation.
The STI Avengers verdict: ST Engineering offers a potentially different earnings engine from the banks. The investment question is whether its operational performance can continue to support its market valuation.
4. Keppel: Can Infrastructure and Asset Management Drive the Next Phase?
Keppel is another candidate for investors looking beyond traditional bank stocks.
Its business transformation has placed greater emphasis on infrastructure, connectivity and asset management. This creates a different investment proposition from both Singtel’s telecommunications and digital infrastructure exposure and ST Engineering’s defence and aerospace businesses.
The potential attraction is that infrastructure-related activities and asset-management capabilities may offer opportunities to build more recurring sources of earnings.
But investors need to distinguish between a business transformation that creates lasting value and one that produces only temporary improvements in reported results.
The opportunity: Turning assets and expertise into recurring income
Infrastructure investment often involves assets and services that are important to the functioning of the economy.
The challenge is to earn attractive returns from the capital committed to these businesses.
Keppel’s investment case therefore depends on several questions.
Can it grow recurring earnings? Can its infrastructure and connectivity businesses secure attractive opportunities? Can its asset-management activities generate sustainable fee income? And can it allocate capital in a way that improves returns for shareholders?
Asset monetisation can also be an important part of the story. Selling assets may release capital, strengthen the balance sheet or allow the company to reinvest in more attractive opportunities.
However, asset sales should not be confused with recurring operating growth. Investors need to understand whether the proceeds create lasting shareholder value and what earnings, if any, are surrendered when assets are sold.
The risk: Transformation does not eliminate capital-allocation risk
A more focused business model is not automatically a more profitable one.
Infrastructure projects can require substantial capital and may face execution, financing and market risks. Asset-management income can also depend on the ability to raise funds, complete transactions and maintain investor confidence.
The market must ultimately assess Keppel on its earnings quality, returns on capital and valuation—not simply the attractiveness of its strategic direction.
What to watch: Recurring earnings, infrastructure investment returns, asset-management growth, asset monetisation, leverage and free cash flow.
The STI Avengers verdict: Keppel provides an infrastructure and asset-management angle, but the crucial test is whether its transformation produces durable improvements in earnings and shareholder returns.
5. Sembcorp Industries: Could Energy Become the Market’s Next Growth Story?
Sembcorp Industries adds a fourth dimension: energy.
Its portfolio spans conventional power generation and renewable energy, giving investors exposure to electricity demand as well as the transition towards lower-carbon energy systems.
This is particularly relevant as economies invest in digital infrastructure, industrial capacity and electricity-intensive activities.
But the relationship between rising power demand and shareholder returns is more complicated than it first appears.
The opportunity: Electricity demand and the energy transition
Power is essential to data centres, manufacturing and a wide range of commercial activities.
Growing electricity demand can create opportunities for power producers. At the same time, governments and businesses are investing in renewable energy as they seek to change how electricity is generated.
Sembcorp has been expanding its renewable energy portfolio across multiple markets.
The potential investment case combines established energy operations with opportunities to expand renewable capacity and participate in changing electricity demand.
The key question is whether this growth can generate attractive returns after accounting for project costs, financing, operating expenses and the risks associated with different markets.
The risk: More capacity does not automatically mean more profit
Renewable energy projects can be capital-intensive. Their economics depend on factors such as construction costs, financing, power-purchase arrangements, resource availability and the prices received for electricity.
Conventional power generation has its own sensitivities, including fuel costs, electricity prices and market conditions.
Investors should also distinguish between installed capacity, projects under construction and capacity that is already operating and contributing to earnings.
These figures describe different stages of a business’s development. Treating them as equivalent can exaggerate the immediate financial contribution of a growth strategy.
Sembcorp therefore needs to demonstrate that portfolio expansion translates into profitable operations and sustainable cash flow.
What to watch: Operating earnings, electricity-market conditions, renewable projects reaching commercial operation, capital expenditure, leverage and returns on new investment.
The STI Avengers verdict: Sembcorp offers exposure to power demand and the energy transition, but the investment case depends on the profitability of its portfolio—not simply the amount of renewable capacity it owns or develops.
6. Which Avenger Could Actually Help Lead the STI?
The four companies offer different business models, but the same investment principle applies to all of them.
A compelling growth narrative is not enough. The share price must also be supported by financial performance and a reasonable valuation.
Consider the differences.
| Company | Potential growth engine | Critical investment test |
|---|---|---|
| Singtel | Digital infrastructure and regional businesses | Can growth translate into stronger earnings and free cash flow? |
| ST Engineering | Defence and aerospace demand | Can orders convert into profitable revenue and cash? |
| Keppel | Infrastructure and asset management | Can the transformation deliver durable recurring earnings and attractive capital returns? |
| Sembcorp Industries | Power and renewable energy | Can portfolio expansion generate attractive returns on invested capital? |
These distinctions matter because the four stocks should not be treated as interchangeable alternatives to the banks.
Singtel’s performance depends on its telecommunications operations, digital infrastructure investments and associates. ST Engineering is exposed to contract execution, defence demand and aerospace activity. Keppel’s returns depend partly on its infrastructure businesses and capital allocation. Sembcorp’s earnings are influenced by power-market conditions and the economics of its energy portfolio.
Their businesses may respond differently to changes in economic growth, interest rates and investor sentiment.
That diversity is useful, but it does not make the stocks immune to a broad market sell-off.
The next question is whether their financial prospects are strong enough to support a more meaningful role in the market.
7. Three Scenarios for Singapore’s Stock Market
The future of the STI need not depend on a simple choice between the banks recovering and the market collapsing.
There are at least three plausible scenarios.
Scenario 1: The banks recover
The recent sell-off proves to be a correction following a strong rally.
Bank earnings remain resilient, concerns about margins and fee income ease, and investors regain confidence in the sector.
In this scenario, DBS, OCBC and UOB could resume their role as major drivers of the STI. The four Avengers might still deliver acceptable returns, but they would not necessarily lead the market.
Scenario 2: Market leadership broadens
The banks stabilise but no longer account for most of the market’s momentum.
Singtel delivers stronger digital infrastructure earnings, ST Engineering converts its order book into profitable growth, Keppel improves recurring earnings and capital efficiency, while Sembcorp generates attractive returns from its energy portfolio.
If these developments are accompanied by reasonable valuations, investors could find more opportunities beyond the traditional banking heavyweights.
This would be the most interesting outcome for investors seeking a broader range of Singapore-listed growth opportunities.
However, it would require actual financial results—not merely a rotation of investor attention.
Scenario 3: The banks weaken and the Avengers disappoint
The more challenging possibility is that the banks continue to fall while the four alternative candidates fail to deliver the growth investors expect.
Rising bond yields could put pressure on equity valuations and financing costs. Slower economic growth could affect business activity. Expensive valuations could leave stocks vulnerable even when their underlying businesses remain sound.
In that environment, diversification across industries would not necessarily protect a portfolio from market-wide losses.
The lesson is that investors should not buy a stock simply because it is not a bank.
They should understand what drives its earnings, what could go wrong and what price they are paying for future growth.
8. The Bigger Question: Can Singapore’s Market Become Less Bank-Dependent?
The STI Avengers is a useful way to think about the next phase of Singapore’s stock market.
Singtel, ST Engineering, Keppel and Sembcorp Industries offer exposure to different parts of the economy: digital infrastructure, defence and aerospace, infrastructure investment, and energy.
Their potential appeal lies in the possibility that these businesses could deliver earnings growth through drivers that differ from those of the banks.
But there is an important distinction between a company becoming more strategically important and its stock becoming a better investment.
A business can be well positioned for long-term growth and still be overpriced. A company can report higher revenue while generating disappointing returns on capital. And a promising investment theme can take years to translate into shareholder returns.
For investors, the challenge is to identify the companies where business momentum, financial performance and valuation align.
The same discipline applies to the banks. A falling share price does not automatically make DBS, OCBC or UOB cheap, just as a compelling story does not automatically make the Avengers attractive buys.
The objective is not to abandon one group of stocks and blindly replace it with another.
It is to understand where sustainable earnings growth and attractive valuations can be found across the market.
Final Verdict: Four Potential Heroes, but No Guaranteed Rescue
Singapore’s stock market has benefited from the strength of its banking giants. Their dominance has also made the STI vulnerable when sentiment towards the sector changes.
Singtel, ST Engineering, Keppel and Sembcorp Industries offer four alternative investment stories worth examining.
But none can be assumed to rescue the index. Their share prices depend on their own financial performance, valuations and market conditions, and their combined influence on the STI is much smaller than that of the three banks.
The real opportunity for investors is not to predict which stock will replace DBS, OCBC or UOB as the market’s champion.
It is to identify companies that can generate sustainable earnings growth, allocate capital effectively and deliver attractive shareholder returns at the right price.
The STI Avengers may not save Singapore’s stock market.
But if market leadership broadens, these four companies could be part of the story.
The question investors should ask is not simply which stock comes next—but which business can justify its valuation when the market’s biggest engines are no longer doing all the heavy lifting.