The Straits Times Index (SGX: ^STI) has performed strongly this year, surpassing investors’ expectations with a year-to-date again of around 15%.
It’s also the bellwether index’s highest level in 17 years.
Along the way, many blue-chip stocks have also hit their 52-week highs as investor sentiment stayed buoyant.
Interest rate cut expectations, along with strong economic growth, could see corporate earnings improve in the coming year.
Here are three high-quality blue-chip stocks that look well-positioned to surpass their 52-week highs.
DBS Group (SGX: D05)
DBS is a familiar household name in Singapore and is also Singapore’s largest bank by market capitalisation.
The lender’s business has thrived as interest rates surged at a rapid pace since 2022.
DBS released a stellar set of earnings for the first nine months of 2024 (9M 2024).
Total income rose 11% year on year to S$16.8 billion on the back of a 5% year-on-year increase in net interest income to S$11.2 billion.
DBS’s non-interest income grew strongly with a 27% year-on-year leap to S$3.2 billion.
Net profit came in at S$8.8 billion and was a record for the bank.
An interim dividend of S$0.54 was declared for the third quarter of 2024 (3Q 2024), up 22% year on year from the S$0.44 paid out in 3Q 2023.
Unsurprisingly, DBS’s share price hit its 52-week and all-time high recently at S$43.02.
There could be more to come from the bank, though.
CEO Piyush Gupta is optimistic that the group’s net interest income can sustain in 2025 at around the same level as 2024, buoyed by loan growth.
This is despite expectations of an interest rate cut by the US Federal Reserve.
He also thinks that the new Trump administration will implement policies that stoke inflation, thus making monetary policy stay tighter than projected.
In such a scenario, interest rates may stay higher for longer.
Non-interest income is also projected to grow by high-single digits year on year, led by an increase in wealth management fees.
DBS has also established a new S$3 billion share buyback programmed designed to manage its excess capital.
The bank may be on track to increase its core ordinary dividend to return more capital back to shareholders.
Hongkong Land Holdings (SGX: H78)
Hongkong Land, or HKL, is a major property development, investment, and management group.
The property giant owns a real estate portfolio spanning 850,000 square metres of luxury retail, office, residential, and hospitality properties.
HKL recently saw its share price hit a 52-week high of US$5.00 and is now trading 35% above where it used to be at the beginning of this year.
The group released a strategy update at the end of October where it detailed its new strategic vision till 2035.
Its aim is to become a leader in Asia’s gateway cities and will focus on ultra-premium integrated commercial properties.
To this end, HKL will no longer make new investments in standalone build-to-sell assets but will, instead, focus on investment properties that bring in recurring rental income.
The group will also rely on third-party capital to help it build up its income stream and seek out potential capital partners to improve capital efficiency.
Its goal is to grow its assets under management from the current US$41 billion to US$100 billion by 2035.
It also hopes to double its dividend per share from current levels by 2035 and use up to 20% of the proceeds from capital recycling to buy back shares from the open market.
Most importantly, HKL believes that its recurring earnings can more than double from US$1 billion to US$2.2 billion by 2035.
Singapore Technologies Engineering (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology and engineering firm that serves customers in the aerospace, smart city, and defence industries.
STE’s share price recently touched its 52-week high of S$4.81 and has dipped slightly to S$4.57.
The engineering giant could be poised to break new highs as it released an encouraging business update for 9M 2024.
Revenue rose 14% year on year to S$8.3 billion for 9M 2024, with healthy year-on-year growth registered for all three of STE’s business divisions.
The group continued to clinch new contract wins, with S$2.2 billion snagged in 3Q 2024 alone.
For 9M 2024, STE garnered new contracts worth S$8.3 billion, lifting its order book to S$26.9 billion as of 30 September 2024.
Of this order book, around 10% or S$2.6 billion is expected to be delivered in the final months of 2024.
Investors should be on the lookout for better financial numbers from the aerospace and engineering company.
CEO Vincent Chong unveiled a refreshed five-year strategy with mid-term targets for 2026.
His goal is for STE to report revenue of S$11 billion by 2026 and is planning an Investor Day event next year to report on the group’s targets and to set the direction post-2026.
The engineering firm will continue to invest in research and development and has paid out an annual dividend of S$0.16 (S$0.04 per quarter) since 2022.
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Disclosure: Royston Yang owns shares of DBS Group.
