Singapore stocks hit record high after 8.9% July surge

Banking stocks gained 13% overall.

The Straits Times Index (STI) surged 8.9% month on month to 5,628.50, reaching a record closing high of 5,713.19 on 29 July as bank shares and other defensive stocks drove the market higher, according to UOB.

The rally was led by DBS Group Holdings (DBS), Oversea-Chinese Banking Corporation (OCBC), and United Overseas Bank (UOB), which reached record highs during the month.

Banking stocks gained 13% overall, whilst plantation, property, and marine counters also advanced.

Retail investors were net buyers of $545m worth of Singapore equities in July, more than offsetting $464m of institutional outflows.

Retail buying was concentrated in transport, infrastructure, and industrial stocks, whilst institutional selling was attributed to portfolio rebalancing.

The rally came despite renewed geopolitical tensions and higher oil prices. Disruptions in the Strait of Hormuz pushed Brent crude up 29% in July to around $120 (US$94) a barrel, raising concerns over inflation and global interest rates.

The Federal Reserve kept its federal funds rate at 3.50% to 3.75%, although three policymakers backed a rate hike.

Markets are now pricing in the possibility of further tightening later this year if inflation remains elevated.

In Singapore, the Monetary Authority of Singapore (MAS) tightened monetary policy by slightly increasing the rate of appreciation of the Singapore dollar’s nominal effective exchange rate (S$NEER) policy band.

The move came as higher energy prices and stronger economic growth raised concerns over imported inflation.

Singapore’s economy grew 5.7% year on year in the second quarter, whilst non-oil domestic exports rose 20.7%.

Electronics exports jumped 105%, reflecting strong global demand for artificial-intelligence-related products, although non-electronics exports fell 2.9%.

Other corporate developments included Keppel’s agreement to sell six offshore rigs for $478m in cash.

The transaction is expected to increase the group’s assets under management by about $3.9b.

SGX also introduced Singapore Depository Receipts for SpaceX, Grab, and Sea, giving Singapore investors access to the companies in Singapore dollars during local trading hours.

($1 = US$0.78)

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