Last year, DBS Group Research’s group head Timothy Wong turned heads when he predicted in his October 2025 report that the STI could reach nearly 10,000 points by 2040. Wong’s colleagues, Yeo Kee Yan and Foo Fang Boon, later said in a Dec 11, 2025, note that the STI could very well reach 4,880 points by the end of this year.
These forecasts are not purely speculative. There are, after all, real catalysts and drivers for the STI’s rally, including the Monetary Authority of Singapore’s (MAS) $5 billion Equity Market Development Program (EQDP) to channel capital into local equities, which has presumably, in turn, inspired $2.6 billion in net retail inflows to local stocks.
Still, investors may want to take a reality check and not mistake the STI’s surge for a rising tide that will lift the entire domestic stock market. Just over half of the STI’s weight comes from the three local banks: DBS Group Holdings, Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank. Many index stocks have gained, but the rally is not too broad-based.
As OCBC’s head of equity research, Carmen Lee puts it, reaching 5,000 points is not a challenge because you “basically just need four [or] five stocks to move up with the STI.”
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A frothy STI may please investors, but it poses a different challenge for regulators focused on building a healthy, dynamic market. Beyond the STI, we need the next-line counters to move as well. After all, a country’s economic core is made up not just of big multinationals but also local small and medium enterprises.
The immense difficulty of revitalising the stock market hasn’t been lost on the country’s policymakers. National Development Minister and deputy chairman of MAS Chee Hong Tat struck a cautiously optimistic tone when he unveiled the central bank’s recommendations to stimulate the local stock market on Nov 19, 2025.
“To build a stronger equities market, we know it cannot be achieved by any single organisation, and there is no single silver bullet to tackle this set of challenges,” says Chee. “We certainly hope that this will help, but in the end, whether it works or not, it’s for the market, it’s for investors, it’s for the companies to decide.”
He is right. Just as there is no silver bullet for bolstering the stock market, there is no clear indicator that will suggest that the market has been revitalised for good.
