Report Summary

• Singapore equities delivered strong performance in 2025, outpacing most key sectors and regional markets, supported by robust economic growth and upgraded GDP forecasts.
• Main investment themes for 2026: attractive dividend-paying big-cap stocks, renewed interest in small and mid-cap companies (SMIDs), and undemanding valuations compared to historical averages.
• Government initiatives, including the SGD5b Equity Market Development Program (EQDP) and dual listing bridge with Nasdaq, are boosting liquidity, investor participation, and trading activities, especially for SMIDs.
• Singapore’s high dividend yields (STI 30 average 4.7%) remain a key differentiator against regional peers.
• Despite some concerns over high valuations in technology stocks, resilient corporate earnings and ongoing AI adoption continue to support market optimism.
• Singapore banks posted solid results, with wealth income and credit-card spending as growth drivers. Share buybacks and dividend payouts remain strong price supports.
• The market is trading at a forward P/E of 13.9x (FY26) and 13.0x (FY27) with dividend yields estimated at 4.9%-5.2%, considered inexpensive versus historical and regional benchmarks.
• OCBC Investment Research maintains an OVERWEIGHT rating for Singapore equities going into 2026, with preferred stock picks across financials, real estate, industrials, and communication services.