To The Moon

$Singtel(Z74.SI)$ $SIA(C6L.SI)$

Singapore’s stock market has quietly staged a notable comeback in 2025, with some blue-chip names surprising investors by reaching fresh all-time highs (ATH). Among the standouts: Singapore Airlines (SIA) and Singtel, both of which have soared to record levels on the back of strong earnings momentum, strategic execution, and improved investor sentiment toward the local equity market.

But are these rallies sustainable? And which other Singapore-listed stocks might be poised for breakout performance in the second half of the year?

This article examines the factors driving SIA’s and Singtel’s historic highs, analyzes broader market sentiment in Singapore, highlights a few other contenders for upside, and offers a verdict on whether investors should buy, sell, or hold these names at today’s elevated levels.

Singapore Stocks Rebound Amid Global Uncertainty

After years of lagging regional peers, Singapore’s Straits Times Index (STI) has begun to attract more attention in 2025. Year-to-date, the STI has gained approximately 11%, outpacing some larger Asian benchmarks such as the Hang Seng and matching the pace of Japan’s Nikkei.

Two key drivers have supported Singapore equities: a resilient domestic economy, underpinned by strong services and tourism, and a growing appetite for defensive, dividend-paying stocks amid ongoing global uncertainties. Rising geopolitical tensions in Europe and the Middle East, coupled with volatility in U.S. tech stocks, have prompted institutional investors to rotate into more stable, high-yield markets — a profile Singapore fits well.

It is in this backdrop that SIA and Singtel have staged their respective rallies, becoming poster children for Singapore’s renewed market appeal.

SIA’s Historic Run: From Survival to Superprofit

Singapore Airlines’ turnaround from the depths of the pandemic to a record profit cycle is one of the more remarkable corporate stories in Asia. The national carrier reported its highest-ever annual net profit earlier this year, buoyed by a robust rebound in passenger demand, higher yields, and tight capacity on key routes.

Helped by strategic fleet investments and continued premium positioning, SIA has been able to command higher fares while keeping costs manageable. Passenger load factors have consistently hovered above 88%, and cargo revenues — though down from pandemic highs — remain above pre-COVID levels.

At a time when global aviation remains uneven — with Chinese carriers facing overcapacity and U.S. airlines battling cost pressures — SIA’s disciplined approach and strong brand equity have stood out. Its stock price reflects this performance: SIA shares are up over 35% year-to-date and have reached a historic high of about SGD 8.30.

Still, skeptics point out that much of the upside may already be priced in, and risks such as rising fuel costs, wage inflation, and potential overcapacity in Asia-Pacific could weigh on future earnings.

Singtel Breaks Out: From Utility to Growth Story

Singtel, long regarded as a defensive telco with limited growth prospects, has surprised investors with its own breakout. Shares of Singapore’s largest telecom operator have rallied over 20% in 2025, touching a new ATH of SGD 3.25, as the company’s multi-year restructuring begins to bear fruit.

Under CEO Yuen Kuan Moon, Singtel has divested non-core assets, streamlined its regional associates, and focused on high-margin businesses like data centers, cybersecurity, and 5G enterprise solutions. Its Optus subsidiary in Australia also posted improved profitability after years of underperformance.

Investors have responded positively to Singtel’s commitment to returning capital through higher dividends and share buybacks, while still reinvesting in future growth areas.

With the Singapore telecom market still highly competitive, and regional associates facing currency headwinds, questions remain about the durability of this rally. However, the market appears to be rewarding management’s strategic clarity and improved capital discipline.

Market Sentiment: Renewed Optimism, Cautious Positioning

Broader market sentiment in Singapore has improved markedly in 2025. Foreign fund inflows have turned positive after several years of net outflows, helped by Singapore’s reputation as a safe haven in times of geopolitical stress and currency volatility.

The STI’s composition — heavy on financials, property, and defensives — has also made it attractive in a year when investors are shying away from expensive tech and cyclical names elsewhere. Bank stocks such as DBS and UOB have also rebounded as higher-for-longer interest rates continue to support net interest margins.

Still, market breadth remains uneven. While blue-chip names like SIA and Singtel shine, many mid-cap and industrial stocks continue to languish, reflecting ongoing concerns about global trade growth and China’s slowing economy.

On the retail side, sentiment has improved, though volumes remain subdued compared to the retail-driven rallies seen in 2021–2022. Investors are clearly more selective, favoring companies with visible earnings growth and solid balance sheets.

Who Else Is Breaking Out?

Beyond SIA and Singtel, a few other Singapore stocks have been quietly outperforming this year and may warrant closer attention:

• DBS Group Holdings (SGX: D05): Southeast Asia’s largest bank is up over 15% YTD, driven by resilient net interest income and strong wealth management inflows. While regulatory scrutiny over recent digital banking outages poses some overhang, DBS remains a core holding for many institutional investors seeking yield and stability.

• CapitaLand Investment (SGX: 9CI): The real estate investment manager has gained nearly 18% this year as global investors flock to high-quality Asian real estate platforms. Its fund management business has delivered steady fee income, and its data center and logistics assets are well-positioned for secular growth.

• ST Engineering (SGX: S63): The defense and engineering group continues to see strong orderbook growth, especially in aerospace MRO and smart city solutions. Shares are up around 12% YTD, with analysts highlighting its defensive earnings profile.

These names underscore the broader theme in Singapore equities: preference for quality, predictable earnings, and some degree of growth optionality.

Valuations: Reasonable but No Longer Cheap

One of the appeals of Singapore equities coming into 2025 was their relatively undemanding valuations compared to regional peers. However, after this year’s rally, valuations have normalized.

The STI now trades at approximately 14x forward earnings — slightly above its 10-year average — with dividend yields still attractive at around 4%.

SIA, for example, is currently valued at about 1.4x book and 12x forward earnings, a premium to historical norms but arguably justified by record profitability. Singtel, at 16x forward earnings and a 4.8% dividend yield, looks more fairly valued given its recent growth.

For investors, the challenge is balancing the improved earnings outlook against the fact that much of the good news may already be reflected in prices.

Verdict: Buy, Sell, or Hold?

Given the backdrop, how should investors position themselves in these breakout names?

• Singapore Airlines: Hold. The stock has had an extraordinary run, and while the long-term outlook for premium travel remains intact, near-term upside may be limited given rising costs and high expectations. Investors might consider locking in some gains but holding core positions for yield and exposure to tourism recovery.

• Singtel: Hold-to-Buy. Singtel’s transformation is still underway, and its exposure to high-growth segments like data centers could continue to surprise on the upside. At current valuations, investors with a medium-term horizon could consider accumulating on pullbacks.

• DBS: Hold. While rates may have peaked, DBS remains well-positioned to deliver steady earnings and maintain generous dividends.

• CapitaLand Investment: Buy. For investors seeking growth in real assets and fee-based income, CapitaLand remains an attractive play at reasonable valuations.

• ST Engineering: Hold. Defensive and dependable, though unlikely to deliver outsized returns from here.

Conclusion: Singapore Stocks Back on Investors’ Radar

Singapore’s equity market has regained its footing in 2025, with iconic names like Singapore Airlines and Singtel reminding investors of their resilience and capacity for transformation. The STI’s strong performance this year reflects not just cyclical tailwinds but also structural improvements in corporate governance, capital allocation, and strategic vision among leading companies.

However, investors should temper expectations of continued double-digit returns from these breakout names. Valuations have caught up to fundamentals, and global uncertainties — from oil prices to geopolitical tensions — could still spark volatility.

For now, the prudent approach is to hold core positions in quality Singapore stocks, selectively add on weakness, and focus on companies with clear earnings visibility and disciplined capital management.

Key Takeaways:

• Singapore Airlines and Singtel have hit historic highs on strong execution and favorable trends. Broader market sentiment has improved, with foreign inflows returning and defensive sectors outperforming.

• Other breakout candidates include DBS, CapitaLand Investment, and ST Engineering.

• Valuations are no longer cheap, but still reasonable relative to peers and earnings potential.

• Verdict: Hold core positions, accumulate selectively on dips, and maintain a medium-to-long-term horizon.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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