Buying after a market rally feels wrong; after all, shouldn’t you buy low and sell high?
Obvious bargains of yesteryear are gone, and many of the best names are sitting at or near record highs.
But waiting for a pullback has its own cost.
Sit in cash while quality businesses keep compounding, and the “expensive” stock you avoided can end up cheaper than the price you were holding out for.
The trick is to separate the share price from valuation; a stock up 30% isn’t quite as attractive if earnings are only up 5%.
So here are three Singapore blue chips I’d still consider today, and what would have to go right, or wrong, from here.
Price Is Up, But Is the Business Worth More Too?
This is the crux of investing: smart investors can differentiate share price from valuation.
Simply put, a rising share price by itself tells you nothing; what matters is whether it has outrun the underlying earnings, dividends and intrinsic value.
When a company’s profits climb as fast as the share price, the valuation barely budges even if the share price reaches new highs.
The discipline is to check today’s valuation against the stock’s own history and its expected growth, and never to buy something just because it’s going up.
Concurrently, it also means you don’t simply ignore a company just because its price is at new highs.
Oversea-Chinese Banking Corporation Limited (SGX: O39), or OCBC – The Dividend and Earnings Compounder
OCBC has rallied hard, crossing S$31 per share recently; crucially, earnings have kept pace with the rally.
For the second quarter ending 30 June 2026 (2Q2026), net profit rose 22% year on year (YoY) to S$2.2 billion, outpacing top-line growth of 18% YoY (total income came in at S$4.2 billion).
The 22% growth in the bottom line continues OCBC’s healthy, double-digit earnings growth trend over the last five years.
Return on equity (ROE) improved to 13.7% for 1H2026, and the bank raised its interim dividend by 15% to S$0.47 per share, representing a steady 50% payout ratio.
Valuation is not overly stretched, with OCBC trading at a trailing price-to-book ratio of roughly 1.4x, against a three-year historical average of 1.3x.
This rally can be sustained, as long as the bank’s insurance and wealth management segments continue delivering.
Increased shareholder returns via higher dividends or buybacks can also support a rising share price.
Singapore Exchange Limited (SGX: S68), or SGX – The Defensive Income Play
Look, SGX had a fantastic rally, up almost 50% this year so far.
The exchange operator is the closest thing to a toll booth on Singapore’s financial markets: whether share prices rise or fall, people trade, and SGX clips a fee, providing defensive, stable cash flows regardless of market conditions.
For context, the latest free cash flow for the year ended 30 June 2026 (FY2026) was healthy at S$788.8 million, supporting a total FY2026 dividend of S$0.57 (S$0.445 as core and S$0.125 as special).
At a share price of S$24.92, this yields roughly 2.3% and has a payout ratio of 68.2%.
With a healthy net cash position, a decent payout ratio, and a history of increasing dividends across the years, this 2.3% yield could easily increase as a function of higher dividends paid moving forward.
Combine higher dividends with possible improvements in operating performance as SGX taps new product innovations, and the future looks decent for this exchange operator.
ST Engineering Limited (SGX: S63) – The Structural Growth Winner
ST Engineering rides genuine multi-year tailwinds — rising defence budgets, aircraft-engine servicing, and smart-city and satcom demand.
The first half ending 30 June 2026 (1H2026) showed the model working: revenue up 11% YoY to S$6.6 billion, but net profit up a far punchier 27% YoY to S$512 million as a richer business mix lifted margins.
Consequently, the interim dividend rose 25% YoY to S$0.05 per share.
The standout is visibility: a record order book of S$35.7 billion as of 30 June 2026, roughly S$5.7 billion deliverable in the rest of 2026 alone — revenue you can nearly see coming.
With a solid balance sheet and structural demand behind it, the stock is up 20+% this year.
The honest catch is valuation: it trades near 30.4x forward earnings, a rich multiple that leaves little room for a stumble.
But How Much Is Too Much to Pay?
That ST Engineering multiple is the right place to pause, because business quality doesn’t suspend the laws of valuation.
Check each P/E or price-to-book against its own history: OCBC’s is a modest premium, SGX’s and ST Engineering’s multiples are frankly full.
When a valuation prices in years of flawless growth, the margin of safety thins, and even a great business can disappoint.
Paying up for quality is fine; overpaying for it isn’t.
Rather than deploying every dollar because the market feels good, build positions gradually — a tranche now, more if prices dip — so a pullback becomes an opportunity, not a regret.
Remember that cash is a position, and favour the strongest businesses over whatever has simply risen most.
What Would Make Me Change My Mind?
Buy-and-hold should never mean buy-and-forget, so each has a thesis-breaker I’d watch.
For OCBC, a sharp rise in Greater China credit losses or stalling wealth-fee growth.
For SGX, a sustained slump in trading volumes, or a payout that stops growing.
For ST Engineering, order-book cancellations, margin slippage, or a valuation drifting even further from realistic growth.
Any of those would make me pause, whatever the share price is doing.
Get Smart: Don’t Let Record Prices Scare You Away from Great Businesses
A strong rally makes investors cautious, and some caution is healthy.
But shunning every stock purely because it’s up means missing the businesses whose earnings and intrinsic value keep compounding — which is how real wealth is built.
The more useful question isn’t “is this cheaper than last year?” but “can this business be worth substantially more in five or ten years?”
Where the answer is yes, and the valuation stays sensible, a record-high price is no reason on its own to stay away.
How do rich Singaporeans invest when volatility hits?
They turn to companies with cash, history, and discipline. This free report highlights 5 blue chips that deserve your attention. Get your copy here and see who made the list.
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Disclosure: Wilson H. does not own shares of any companies mentioned.
