Broker: OCBC Investment Research
Date of Report: 4 August 2025

60 Compelling Reasons to Invest in Singapore Stocks: Top Picks, Market Insights, and Sector Analysis for 2025

Celebrating 60 Years of Singapore’s Transformation: A Market Overview

Singapore marks its 60th year of independence in 2025, having evolved from swampland into a global metropolis. This milestone year is filled with nationwide celebrations, special retail promotions, and corporate events, but for investors, it’s also a time to reflect on the market’s journey and the compelling investment opportunities ahead.
The city-state’s journey from textile and electronics manufacturing in the 1960s and 1970s to its current status as a digital powerhouse is rooted in intentional, strategic policy-making and robust investment. As Singapore enters the next decade, the combination of regional growth and rising affluence in Asia stands to unlock even more opportunities for investors.

Why Singapore Remains a Premier Investment Destination

• Economic and Political Stability: Singapore’s consistent political landscape and economic stability have made it a safe haven amid global uncertainty, with the Straits Times Index (STI) reaching record highs above 4,000 in July 2025. The STI has delivered a stable 3.0% annual growth over the past 20 years.
• Wealth Hub Status: The country attracts robust foreign direct investment and is positioned as a key wealth center, further reinforced by a rising number of family offices and growing assets under management.
• Rising Affluence in Asia: Asia is expected to house more than 50% of the world’s wealthiest individuals by 2028, supported by digital transformation, entrepreneurial policies, and increased regional trade.
• High Dividend Yields: Singapore-listed companies offer attractive yields, averaging 5% for the STI, outpacing the region and providing stable returns in a low-rate environment.
• Strong Currency: The Singapore dollar has appreciated against the USD by approximately 6.1% in 2025, benefiting foreign investors.

Singapore’s Equity Market: Growth, Yields, and Resilience

• Market capitalization has doubled over 20 years, from USD247 billion to USD502 billion (3.5% CAGR).
• The STI’s compounded growth rate stands at 3.0% over two decades, with an average dividend yield of 4%, providing a strong total return of 7.0% annually.
• Singapore Treasury bills remain in high demand, with cover ratios far exceeding supply and yields higher than pre-pandemic levels.

Sector-by-Sector Analysis and Top Stock Picks

Financials: Strong Foundations and Shareholder Returns

The financial sector comprises almost half of the STI’s market capitalization. Singapore’s leading banks, particularly DBS Group and United Overseas Bank (UOB), are committed to robust shareholder returns via share buybacks and dividends. Structural hedging on loans books helps mitigate pressure from potential US Federal Reserve rate cuts, supporting net interest margins (NIM). While lower rates are anticipated compared to 2023-2024, these have already been factored into earnings projections, and asset quality is expected to benefit as rates decline.

S-REITs: Poised for a Rebound

After underperforming in recent years, S-REITs (Singapore Real Estate Investment Trusts) are back in focus with a strong 8.5% total return year-to-date. Key drivers include expectations of US rate cuts, declining Singapore government bond yields, and narrowing spreads. The forward yield spread between S-REITs and 10-year government bonds is at a healthy 396 basis points.

Top S-REITs Picks:

• CapitaLand Ascendas REIT
• CapitaLand Integrated Commercial Trust
• Keppel DC REIT
• Parkway Life REIT
• Mapletree Logistics Trust

Developers and Real Estate Investment Managers (REIM)

Singapore’s private residential property market has shown resilience, with prices up 1.8% in 1H25 and forecasted to grow 2-4% for the year. Strong household balance sheets, favorable rates, and robust new project sales (7,000-8,000 units expected in 2025) underpin the market. However, recent property cooling measures—longer Seller’s Stamp Duty holding periods and rate hikes—pose a key risk.
Major developers like UOL Group and City Developments Limited (CDL) maintain sales momentum and are diversifying income streams with sizable landbanks and investment properties. CapitaLand Investment Limited (CLI) and Keppel Corp are aggressively growing their funds under management, especially in new economy assets like data centers.

Order of Preference in Real Estate:

• CapitaLand Investment Limited (CLI)
• UOL Group (UOL)
• City Developments Limited (CDL)

Communication Services: Defensive Leaders and Digital Growth

Singapore Telecommunications (Singtel) has been a standout in 2025, driven by its defensive profile, strong dividend outlook, improving fundamentals, and AI tailwinds. Investors are watching for further improvements in returns on invested capital, earnings growth, and data center expansion.
Sea Ltd (SEA), a major sector component, reaffirmed strong guidance for 2025: 20% GMV growth, improving margins, and expanding its digital entertainment (Garena) user base.

Industrials: Navigating Uncertainty, Embracing Secular Themes

The Industrials sector has performed robustly year-to-date, with three major trends:

• Tariff and Policy Uncertainty: Companies are adopting a wait-and-see approach, resulting in slower order book growth for names like Seatrium and Boustead Singapore. Strong balance sheets and backlogs are key to resilience.
• Defence Premium: ST Engineering benefits from geopolitical tensions and global defense spending, though valuations are high and execution risk remains. Sembcorp Industries and Keppel Ltd offer exposure to longer-term themes like AI and green energy, with attractive valuations.
• Small/Mid-Cap Renaissance: Market reforms such as the Equity Market Development Program (EQDP) are expected to revitalize smaller names, many of which are already trending higher.

Consumer Sector: Resilience Supported by Government Handouts

Retail sales grew 1.4% year-on-year in May 2025, with supermarkets and hypermarkets up 7.2% thanks to government vouchers under the SG60 Package. Sheng Siong Group stands out as a prime beneficiary, gaining 27% year-to-date on its defensive earnings profile, market share gains, and potential capital inflows from the EQDP.

60 Reasons to Stay Invested in Singapore

Top Singapore Stock Picks for 2025

Comprehensive Company Coverage & Ratings

Beyond the top picks, OCBC’s coverage includes a broad set of Singapore companies across sectors, ranging from large-cap stalwarts to promising small/mid-caps. Each is rigorously analyzed for potential upside and current value, with clear Buy/Hold recommendations to guide investors.

Conclusion: Singapore – A Market of Stability, Innovation, and Opportunity

Singapore’s equity market stands on a foundation of stability, strong governance, and forward-looking policy. With its safe haven status, high dividend yields, and strategic focus on new economy sectors, the city-state continues to offer investors a compelling blend of security and growth potential. As the nation celebrates its 60th anniversary, the future for Singapore equities looks brighter than ever.
For investors seeking steady returns, resilience against global shocks, and exposure to Asia’s growth, Singapore’s market remains a top destination. With a robust stock selection across all major sectors, now is an opportune time to stay invested and ride the next wave of Singapore’s success.