Interactive: The Straits Times Index – Race to 4,000 points

[SINGAPORE] The benchmark Straits Times Index (STI) has been on a tear in the past year or so, with multiple sessions ending in new all-time highs.

On Mar 28, Singapore’s blue-chip index for the first time in its 59-year history crossed the 4,000-mark – seen by market watchers as a significant psychological threshold – before settling to close at 3,972.43 points.

After this first breach, the money is on the STI continuing to ride above 4,000 points sooner rather than later.

“The STI breaking 4,000 is a key psychological milestone, which could be interpreted as strong investor confidence, resilient blue-chip performance and a favourable economic climate,” said Daphne Tan, business development director at CMC Markets Singapore.

After trading mostly sideways in 2023 as the US Federal Reserve continued to hike interest rates to curb inflation, the market picked up towards the end of the year as rates began to be held steady.

Fed chairman Jerome Powell buoyed investor sentiment around the middle of 2024, with indications that interest rate cuts might come sooner than expected.

By September, the recovery was in full swing, as the Fed cut rates for the first time in four years.

This year, the Singapore market has been lifted by optimism over the first set of measures announced by the Monetary Authority of Singapore (MAS), which included a S$5 billion boost to the equities market.

DBS Group Research in early March lifted its year-end target for the STI to 4,080, from 3,950 previously.

This comes after “factoring in a potential S$15 billion to S$30 billion liquidity boost from the recently announced MAS support measures”, said analysts Yeo Kee Yan and Foo Fang Boon.

Singapore Exchange (SGX) market strategist Geoff Howie noted that STI’s recent charge to 4,005.18 points coincided with above-trend gross domestic product growth in 2024 at 4.4 per cent, and a cautiously optimistic market outlook for 2025.

“Despite the past 12 months of near-30 per cent total returns as at early trading on Mar 28, the STI continues to maintain one of the highest dividend yields across the region,” he added.

SGX noted in a statement that since its inception in 1966, the STI has delivered strong returns to investors, with a total return of 40 per cent over the last three years, representing a compound annual growth rate (CAGR) of 11.9 per cent.

This surpasses even the S&P 500 index, which generated a total return of 31 per cent, or a CAGR of 9.4 per cent.