DBS raises Straits Times Index year-end target

Due to a potential $15b to $30b liquidity injection from the Monetary Authority of Singapore’s equity market support measures.

Singapore’s stock market is poised for a liquidity-driven rally, with the Straits Times Index (STI) year-end target lifted to 4,080, up from the previous 3,950 projection, according to DBS.

DBS analysts attribute this upward revision to a potential $15b to $30b liquidity injection from the Monetary Authority of Singapore’s (MAS) newly announced equity market support measures.

Meanwhile, the average daily trading value on SGX is expected to increase by 6.8% to 12%, fuelling investor confidence in large-cap stocks.

Singapore’s financial and industrial sectors have been the biggest winners, DBS noted, with banks delivering record FY24 profits and strong performances from ST Engineering and Sembcorp Industries.

Following the latest 4Q24 earnings season, analysts have identified five stocks with strong growth potential: iFAST, Grand Venture, Sembcorp Industries, UMS, and CapitaLand Integrated Commercial Trust.

On the other hand, Singapore Airlines and Aztech are stocks to avoid due to weaker earnings outlooks and sector-specific challenges.

DBS keeps Singapore’s GDP for 2025 at 2.8%, aligning with its medium-term growth potential of 2-3%.

Although, core inflation projections have been lowered to 1% (previously 1.5%), with government subsidies and stable import prices helping to contain cost pressures.

Market volatility remains a concern, with US economic slowdown fears, trade uncertainties, and potential Fed rate cuts posing risks.

DBS analysts set the near-term resistance at 3,950-4,000, whilst support levels stand at 3,815 and 3,710.

With fresh capital inflows, resilient corporate earnings, and supportive government policies, Singapore’s stock market is expected to maintain a positive trajectory.

Analysts recommend buying on pullbacks, particularly in financial, industrial, and technology sectors with strong fundamentals.