Dear readers, the Straits Times Index (STI), benchmark indicator for Singapore stocks markets closed at 3,904.85 yesterday, one of the highest levels for the STI since 2007. In fact, on 10 Feb 2025, the STI reached even higher, an all time high of 3,921.30 since 2007.
It is a strong showing for STI and an encouraging sign. Notwithstanding these, there are 3 things to know about the STI right now.
First, while the STI is now on a good level last seen in 2007, many indices have fared much better. For example in Feb 2007, the NASDAQ is around 2,500 and fast forward to today, the NASDAQ is now more than 20,000 or a 8-multi bagger. We cheered the STI for returning to its previous highs but on a larger scheme of thing, investors are back to where they are, 17 years ago capital wise for the STI, not counting dividends.
Second, the rally in STI since last years was although impressive but many in the market know that the rally was driven by a few large cap stocks like DBS, OCBC and UOB and perhaps other few STI constituent winners like YangZiJiang stock. Across the STI, the gains among the constituent stocks was more humble and same for across the entire Singapore stocks markets. Thus, I believe the STI’s strong showing should not be mistaken that the entire Singapore stocks markets have done excellently.
Last but not least, one thing interesting to note on the STI will be the announcement of more measures from the MAS Review Committee to revigorated the local bourse. Initial measures announced last week which include tax incentives did not seem to impress the market and SGX stock was down by 5% on the same day after the initial measures were announced. Let us stay tuned on how the STI may be positively impacted for the short and longer term following the announcement of more measures to come from the Review Committee.
I always am of the view that it should not just be a number games to measure the quality of the Singapore stocks markets: number of IPOs, number of delisting, the level the STI reaches. As a retail investor, it will be more meaningful if we have a good ecosystem here that makes the Singapore stock markets interesting, perhaps more and better interesting coverage, a bunch of easily identified multi-bagger stocks that can grow our wealth and last but not least, please weed out the “bad apples” in the Singapore stock markets. There have been too many cases of local investors investing in a supposedly high growth stock only to find their capital lost as a result of company delisting or significantly reduced from declining share price.