Retail flows cushion swings in Singapore equities

Institutions and foreign investors still steer the Straits Times Index.

Retail flows may cushion swings in Singapore equities, but institutional and foreign investors will continue to drive moves in the Straits Times Index, analysts said.

“Retail investors influence the STI at the margin, not at the core,” Geoff Howie, market strategist at Singapore Exchange Ltd., told Singapore Business Review in an emailed reply to questions.

Retail investors posted net inflows of about $640m in March, even as institutions and foreign investors sold during bouts of global uncertainty linked to the war in the Middle East, according to exchange data.

Howie said these flows support trading rather than set direction, making it easier to buy and sell shares and tempering sharp price swings during weaker sessions.

Retail activity is more evident in mid-cap shares, smaller STI constituents and Singapore‑listed real estate investment trusts (REIT), where individual investors account for a bigger share of turnover.

Vijay Natarajan, vice president for equity research for real estate and REITs at RHB Banking Group, said Singapore’s retail category includes high‑net‑worth people, family offices and private banking clients.

“The definition of retail matters,” he said in a Zoom interview, adding that a large pool of high‑net‑worth money is captured within retail data.

Exchange data show retail net buying this year has focused on REITs, financial stocks, and selected consumer shares, reflecting demand for yield and earnings visibility amid low fixed deposit rates.

Natarajan said yield, tax efficiency, and exposure to property assets remain key reasons for retail interest in listed real estate investment trusts.

Howie said retail investors tend to be price‑sensitive, buying after falls and trimming exposure after rallies, making their flows more supportive than directional.

Since end‑2019, retail investors have been net buyers of about $17b in Singapore stocks, providing a steady domestic source of demand, according to exchange data.

Institutional and foreign flows, however, still set overall market direction during periods of macroeconomic stress, particularly when global risk sentiment turns.

Retail participation supports liquidity and stability, but should be read alongside flow and positioning indicators, Howie said.