Review: Singapore equities jumped 5.6% in January, capping a 28% rally over a record
nine consecutive months of gains. Property companies led the advance, driven by
optimism about new launches, favourable interest rates, and a reduced risk of cooling
measures. (Figure 2). All three banks similarly reported gains (Figure 1). Shipyards
retreated over soft container rates and litigation concerns (Figure 3). REITs
underperformed (Figure 4) with modest gains (Figure 7). The Next 50 index was up
2.6% for the month. By asset class, Singapore equities outperformed the US, with
commodities the biggest gainers due to a rally in natural gas (+18.1%) and crude oil
(+16.1 %) – Figure 5.
Outlook: US GDP Now is tracking at 5% GDP growth QoQ for January (Figure 8). This
is the highest growth since 3Q23 and an acceleration of 4Q25 3.6%. The biggest boost
to GDP comes from investment, with consumer spending remaining resilient. US retail
sales are expanding at a healthy 4% YoY (Figure 9).
In Singapore, economic conditions are robust. Industrial production in 4Q25 rose
18.7% YoY, the best performance in 32 quarters or since 3Q17 (Figure 10). Growth has
been driven by the 24.5% jump in electronics. Electronics production is supported by
a surge in demand for semiconductors and hard disk drives. Another driver of growth
is the leveraging of the economy. Loan growth rose 6.1% YoY in 2025, supported by
buoyant consumer loans of 7.2% YoY (Figure 11).
Recommendation: We remain positive on Singapore equities. Valuations of 16x PE is
modestly above the historical average of 15x (Figure 12). There is room for valuation
expansion with the low interest rates of 1.16% (3M SORA), which has more than
halved (Figure 13) and captive EQDP+ liquidity flowing into Singapore equities.
Earnings growth will be supported by the Capex cycle in semiconductors, renewables,
AI, and construction. An additional pillar is residential property. The jump in TSMC’s
2026 Capex guidance by 31% YoY to US$54bn is a major boost for equipment makers.
TSMC further stated that Capex will be significantly higher over the next 3 years and
pull forward construction of existing fab schedules. ASML’s net bookings spiked 85%
YoY in December quarter to EUR13bn. The momentum and visibility in orders will be
positive for Frencken. In construction, BCA raised its 2026 construction demand
guidance by 18%, from mid-point S$42.5bn to S$50bn (Figure 14). There will be a slew
of construction contracts from massive T5 tenders, hospitals, BTOs, Marina Bay Sands,
and Harbour Front Redevelopment. New home sales in Singapore (excl. EC) surged
65% in 2025 to 10,951 units (excl. EC). The underlying conditions for residential
property are healthy, with low interest rates, HDB upgraders, population growth,
wealth transfers from parents, lifestyle choices, and low inventory (Figure 15).
Important Information
This report is prepared and/or distributed by Phillip Securities Research Pte Ltd ("Phillip Securities Research"), which is a holder of a financial adviser’s licence under the Financial Advisers Act, Chapter 110 in Singapore.
By receiving or reading this report, you agree to be bound by the terms and limitations set out below. Any failure to comply with these terms and limitations may constitute a violation of law. This report has been provided to you for personal use only and shall not be reproduced, distributed or published by you in whole or in part, for any purpose. If you have received this report by mistake, please delete or destroy it, and notify the sender immediately.
The information and any analysis, forecasts, projections, expectations and opinions (collectively, the “Research”) contained in this report has been obtained from public sources which Phillip Securities Research believes to be reliable. However, Phillip Securities Research does not make any representation or warranty, express or implied that such information or Research is accurate, complete or appropriate or should be relied upon as such. Any such information or Research contained in this report is subject to change, and Phillip Securities Research shall not have any responsibility to maintain or update the information or Research made available or to supply any corrections, updates or releases in connection therewith.
Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this report are as of the date indicated and are subject to change at any time without prior notice. Past performance of any product referred to in this report is not indicative of future results.
This report does not constitute, and should not be used as a substitute for, tax, legal or investment advice. This report should not be relied upon exclusively or as authoritative, without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that this report has been made available constitutes neither a recommendation to enter into a particular transaction, nor a representation that any product described in this report is suitable or appropriate for the recipient. Recipients should be aware that many of the products, which may be described in this report involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made, unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks.
Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of any product. Any decision to purchase any product mentioned in this report should take into account existing public information, including any registered prospectus in respect of such product.
Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may provide an array of financial services to a large number of corporations in Singapore and worldwide, including but not limited to commercial / investment banking activities (including sponsorship, financial advisory or underwriting activities), brokerage or securities trading activities. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have participated in or invested in transactions with the issuer(s) of the securities mentioned in this report, and may have performed services for or solicited business from such issuers. Additionally, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have provided advice or investment services to such companies and investments or related investments, as may be mentioned in this report.
Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report may, from time to time maintain a long or short position in securities referred to herein, or in related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other compensation in respect of the foregoing. Investments will be denominated in various currencies including US dollars and Euro and thus will be subject to any fluctuation in exchange rates between US dollars and Euro or foreign currencies and the currency of your own jurisdiction. Such fluctuations may have an adverse effect on the value, price or income return of the investment.
To the extent permitted by law, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may at any time engage in any of the above activities as set out above or otherwise hold an interest, whether material or not, in respect of companies and investments or related investments, which may be mentioned in this report. Accordingly, information may be available to Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, which is not reflected in this report, and Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may, to the extent permitted by law, have acted upon or used the information prior to or immediately following its publication. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the issuance of this report, may have issued other material that is inconsistent with, or reach different conclusions from, the contents of this report.
The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities Research to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction.
This report is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this report may not be suitable for all investors and a person receiving or reading this report should seek advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products.
This report is not intended for distribution, publication to or use by any person in any jurisdiction outside of Singapore or any other jurisdiction as Phillip Securities Research may determine in its absolute discretion.
IMPORTANT DISCLOSURES FOR INCLUDED RESEARCH ANALYSES OR REPORTS OF FOREIGN RESEARCH HOUSE
Where the report contains research analyses or reports from a foreign research house, please note:
Paul has 20 years of experience as a fund manager and sell-side analyst. During his time as fund manager, he has managed multiple funds and mandates including capital guaranteed, dividend income, renewable energy, single country and regionally focused funds.
He graduated from Monash University and had completed both his Chartered Financial Analyst and Australian CPA programme.
