Singapore shares rise as regional markets end mixed

[SINGAPORE] In a day of mixed performances across the Asia-Pacific region, the Singapore stock market showed a modest gain, as the Straits Times Index (STI) ended the trading session up by 0.2%. While regional markets struggled with fluctuations, Singapore’s market closed on a positive note, underpinned by steady gains in key sectors. This article takes a closer look at the factors contributing to this rise and how it compares with the regional landscape.

Singapore’s Positive Performance

On March 13, 2025, the Straits Times Index (STI) closed at 3,274.98, marking a 0.2% increase, despite mixed signals from other regional markets. The modest rise of the STI was influenced by positive performances from several of Singapore’s key sectors, particularly in banking and real estate.

“Singapore shares rose on Wednesday, supported by a gain in banking and real estate stocks,” which was a major driver for the upward movement in the index. The banking sector has been a steady performer in Singapore due to the country’s stable economic conditions and the strength of its financial institutions. This resilience in key sectors helped offset some of the concerns brought about by global market uncertainties.

Regional Market Trends: A Mixed Bag

Across the rest of Asia, the trading day was more volatile. Key regional markets ended on a mixed note, with some markets showing slight losses while others experienced gains. For example, Hong Kong’s Hang Seng Index ended lower by 0.4%, while Japan’s Nikkei 225 saw a modest gain of 0.1%. In contrast, Australia’s ASX 200 had a strong showing, up by 0.5%, largely driven by gains in the materials and energy sectors.

The disparity in performance across the region reflects the varied market conditions and investor sentiment in different economies. For instance, Hong Kong’s struggles were partly due to ongoing geopolitical concerns, while Japan’s modest gain was attributed to investors’ mixed outlook on its economy and corporate earnings. Meanwhile, Australia's positive performance was supported by rising commodity prices and strong demand for resources.

The Singapore Market's Stability Amid Regional Volatility

Despite the mixed regional performance, Singapore’s stock market displayed resilience. The STI's gain of 0.2% was a welcome sign of stability amid the broader regional volatility. A key factor that may have contributed to the positive sentiment in Singapore is its status as a global financial hub with a strong, diversified economy.

According to analysts, Singapore's economic stability and robust financial infrastructure have positioned its stock market to weather global uncertainties better than many of its regional counterparts. The Singapore Exchange (SGX) continues to be a favorable destination for investors seeking safe havens in times of geopolitical or economic volatility.

"Singapore continues to be a safe haven for investors in the region, thanks to its strong economic fundamentals and resilient financial sector," said a senior analyst at DBS Bank. This sentiment is reflected in the performance of Singapore’s key stocks, including those of its major banks, such as DBS Group Holdings and United Overseas Bank (UOB), both of which posted notable gains during the session.

Key Sectors Driving the STI’s Performance

The banking sector was one of the primary drivers of the STI's gain. Both DBS and UOB saw their stock prices rise, supported by continued investor confidence in their ability to generate stable returns. This performance aligns with broader trends in Asia, where banking stocks are generally seen as safe bets in uncertain times. Analysts have noted that Singapore banks have been relatively insulated from global macroeconomic pressures, thanks to their diversified portfolios and solid risk management practices.

Another important contributor to Singapore's positive performance was the real estate sector. Stocks in property developers such as CapitaLand Development and City Developments Limited (CDL) saw upward momentum, thanks in part to strong demand for residential and commercial properties in Singapore. The city-state’s resilient property market, backed by low-interest rates and government support, has continued to buoy investor sentiment in the sector.

“Real estate stocks in Singapore also had a good day, helped by continued optimism in the local property market.” Despite challenges in some other regions, Singapore's real estate market remains a bright spot, attracting both local and international investors seeking stable returns in a low-interest-rate environment.

Global Economic Concerns and Their Impact

While Singapore’s market remained resilient, broader global economic concerns continued to create uncertainty. Investor sentiment in the Asia-Pacific region has been affected by factors such as inflationary pressures, fluctuating commodity prices, and potential slowdowns in major economies, such as China and the United States. The mixed performance in regional markets reflects this broader uncertainty, with some investors choosing to take a more cautious approach.

In particular, the volatility in global oil prices and supply chain disruptions have continued to weigh on market sentiment. As noted by analysts, “Global economic headwinds, particularly in the energy sector and supply chains, remain a significant challenge for investors looking for stability.”

Singapore’s strong economic policies and fiscal discipline have helped mitigate some of these global risks. By maintaining a stable currency and fostering a business-friendly environment, Singapore continues to attract foreign investment, which supports its market performance even in times of broader global uncertainty.

The Role of Foreign Investment in Singapore’s Market

Foreign investment has played a crucial role in supporting the Singapore stock market. As a global financial hub, Singapore is often seen as an attractive destination for foreign capital, particularly in the face of ongoing uncertainties in other parts of Asia. The country’s strong regulatory framework, transparent market conditions, and investment-friendly policies have all contributed to its appeal.

Singapore’s open economy and commitment to free trade have also helped it stay connected to global markets, which is particularly important for attracting foreign institutional investors. These investors often view Singapore as a safe haven, especially when other regional markets face challenges.

Analysts have noted, "Foreign investment continues to flow into Singapore due to its status as a regional financial center and its consistent economic performance." This influx of capital has provided a much-needed cushion against external shocks, allowing the STI to maintain its upward trajectory even when other markets in Asia are more volatile.

Outlook for Singapore’s Market

Looking ahead, analysts are cautiously optimistic about Singapore’s stock market. While global economic conditions remain uncertain, Singapore’s stable economy and resilient sectors such as banking and real estate are expected to provide continued support for the STI. Moreover, the country’s effective handling of the COVID-19 pandemic and its strong economic recovery have bolstered investor confidence.

However, challenges still loom on the horizon. Ongoing geopolitical risks, fluctuations in commodity prices, and global inflationary pressures are factors that could dampen market sentiment. Nevertheless, Singapore's relatively strong position in the region, combined with its well-established financial infrastructure, positions it as one of the more stable markets in Asia.

"While global uncertainties will likely continue to affect market performance, Singapore’s economy remains one of the most resilient in the region," said a market strategist at OCBC Bank.

While regional markets in the Asia-Pacific region showed mixed performances, Singapore’s stock market demonstrated resilience with the STI rising by 0.2%. This positive performance can be attributed to strength in key sectors, particularly banking and real estate, as well as the stability of Singapore’s economy in comparison to its regional counterparts. Foreign investment continues to flow into the country, adding to the market’s stability, even amid broader global uncertainties.

The outlook for Singapore’s market remains cautiously optimistic, with analysts expecting the country to maintain its status as a regional financial hub and a safe haven for investors. However, the broader global economic landscape, particularly concerning inflation and commodity price fluctuations, will continue to play a significant role in shaping market sentiment in the months to come.