Market participants share their views on where investors can find value in Singapore’s equity market. HSBC’s Q1 2026 investment outlook report notes that Singapore continues to provide compelling dividend yields. Singapore Summit: Meet the largest APAC brokers you know (and those you still don't!).The bank has an overweight view on Singapore stocks for their elevated dividends and defensive character, which it feels can help dampen portfolio volatility.Singapore Valuations Driven by Structural GrowthThis perspective is shared by Gidon Kessel, group head deposits and wealth management at UOB, who adds that domestic companies have displayed improving earnings momentum in a market with high-yielding stocks across different market capitalisations, including small- and mid-caps.Investors are responding to companies that are deliberately building capabilities, strengthening capital management discipline, improving disclosure and engaging more actively with the investor community to explain how shareholder value is created and sustained.“That said, valuation confidence tends to be stronger where company strategies are aligned with longer-term economic growth drivers, such as infrastructure renewal, energy transition, supply chain realignment and regional demand growth, rather than relying on cyclical or thematic sector momentum alone,” notes Geoff Howie, SGX market strategist.He expects stronger valuation confidence where companies invest in understanding their value drivers, articulate them clearly and communicate consistently across cycles. This includes clarity around capital allocation, operating metrics and risk management, rather than reliance on sector tailwinds or broad macro narratives.Investor Communication, Governance and Market DepthCommunications matter because even well-defined strategies are discounted if investors cannot understand them. Communities matter as peer learning, governance standards and market engagement help lift overall confidence and comparability.That is the view of Robin Harris, Ocorian's regional head of APAC, who says investors are increasingly focused on companies that use the current spotlight to commit to disciplined disclosure, consistent metrics and proactive investor engagement, supported by research coverage, institutional participation and a disclosure-based regulatory regime.“Together, these factors can deepen liquidity, strengthen price discovery and build a more compelling and resilient market for investors over the long term,” he adds.Banks and REITs Dominate Singapore’s Income ProfileThe Singapore market is concentrated in banks and REITs, which gives it a more income-driven profile. At the same time, it offers stability and steady earnings, which continues to appeal to institutional investors.On the macro side, geopolitical uncertainty and inflation risks are also influencing rate expectations, which in turn would affect how different sectors are going to be valued, explains Lydia Chin, senior manager fund solutions at Vistra in Singapore.“Banks and REITs remain key holdings for income-focused investors,” she says. “Banks continue to look resilient with strong earnings and dividends. REITs are more mixed, still under pressure from higher interest rates and refinancing costs, where we are seeing more selective repositioning rather than broad de-risking, particularly into higher quality, well-leased assets.”Earnings Outlook and Valuation BackdropPolicy reforms have gone some way to closing the liquidity discount that Singapore equities have carried for years. The earnings backdrop is solid — with banks in particular delivering — while the broader Straits Times Index, or STI (a market capitalisation-weighted index that tracks the performance of the top 30 companies listed on SGX), is on track for high single-digit earnings growth in 2026.“In addition, Singapore's safe haven appeal has driven real capital inflows that many other markets in the region simply aren't seeing, and a 4–5% dividend yield is hard to argue with in the current environment,” says Patrick Na, head of financial services South East Asia at TMF Group.He also acknowledges that a lot of the re-rating has already happened and, with the STI trading well above its historical average P/E, the market needs earnings to do the heavy lifting from here.Where Investors are Finding OpportunitiesAccording to Na, the most interesting opportunities are in small- and mid-caps, which trade at a meaningful discount to regional peers.“Within that universe, industrials and trade connectivity names are where I would focus attention,” he says. “On the large-cap side, the banks (DBS, OCBC and UOB) are hard to avoid. The dividend yields are attractive and the balance sheets are in good shape. S-REITs are worth a closer look too, particularly in data centres, logistics and hospitality, where the underlying demand story is strong and falling rates improve the economics.”“Telecoms — particularly Singtel — are interesting for a slightly different reason; there is asset monetisation potential there that I don't think the market has fully credited yet.”Jupiter Asset Management owns five stocks in Singapore, all with strong governance and balance sheets, observes investment manager of Asian equities Sam Konrad.“We see DBS as not just the best bank in Singapore but one of the best banks in the world,” he says. “ST Engineering is a very high-quality defence company in a sector with strong structural tailwinds, while Singtel gives us exposure to the telco markets of India, Australia, Thailand, Indonesia and the Philippines, as well as growth from data centres.”CapitaLand Integrated Commercial Trust owns some of the highest-profile office and retail assets in Singapore. The firm also owns Genting Singapore, an integrated resort with one of the two casino licences in the country, which it views as a way to play increased tourism and leisure spending in the region.Broad-based Sector Strength in 2026Almost all of Singapore’s equity sectors are “firing on all cylinders” for investors in 2026, reckons Robert St Clair, head of investment strategy at Fullerton.“Equity market alpha has broadened and deepened, with significant contributions from industrials (benefiting from robust external demand and productivity gains), financials (gaining from strong loan growth and non-interest income) and communications and utilities, where cost controls have been important,” he says.Defence is another sector that could still see good opportunities for growth due to current geopolitical uncertainties, adds Carmen Lee, head of equity research at OCBC.“With Singapore’s smart nation focus, we expect AI-related investments to be a strong long-term mega trend that will benefit companies that are either offering AI-related services or using AI to grow their businesses or reduce costs,” she says. “Core defensive industries in telecommunications and renewable energy are likely to remain preferred holdings.”Adeline Gao, research analyst at FSM Global, observes that the banking sector is expected to see net interest margin stabilisation this year, while wealth management remains a key growth driver supported by safe-haven inflows amid global uncertainty.“Beyond financials, Singapore’s semiconductor supply chain players are positioned to benefit from the ongoing global ‘giga cycle’, supporting both revenue growth and order visibility,” she says. “In addition, industrial names with exposure to defence and strong order backlogs are expected to deliver sustained earnings growth, supported by rising global defence spending and increased procurement activity.” This article was written by Paul Golden at www.financemagnates.com.

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