From a 52-week low in April to a record high in September, the Straits Times Index (SGX: ^STI) has pulled off one of its sharpest rallies in years.
Back in April, the index had slumped to 3,393 as a tariff shock added to worries about global growth. Fast forward five months and the STI has just crossed 4,300.66 on 4 September 2025, a fresh record and a 27% rebound that few investors saw coming.
What Changed?
The tariff shock initially sent trade-dependent economies reeling and fear dominated headlines. Yet Singapore’s market proved more resilient than expected, attracting investors who were looking for stability.
Singapore’s companies also delivered when earnings season came. The banks DBS Group (SGX: D05), OCBC (SGX: O39), and UOB (SGX: U11) posted strong results that proved their resilience. These institutions kept their strong capital positions and continued paying dividends to patient investors.
But it wasn’t just banks. Companies across sectors showed they could generate solid earnings even when uncertainty was everywhere. REITs, which struggled the last few years are now also making a comeback with their steady cash flows and attractive yields.
The Monetary Authority of Singapore’s S$5 billion Equity Market Development Programme provided extra fuel, injecting liquidity and boosting confidence across the board.
Record Highs and Human Psychology
Should you buy when markets hit record highs? It is the question on every investor’s mind.
The data shows that new highs often lead to more highs. Think back to April, when fear had frozen many people in their tracks. Those who stayed invested, or even added to positions during that period of maximum pessimism, were rewarded handsomely.
Even after this run, the numbers do not look stretched. The STI is trading at about 13.4 times earnings, well within its historical range and much cheaper than the US market. The dividend yield sits around 4.1%, still offering solid income compared to fixed deposits or bonds.
Of course, risks remain. A slowdown in global growth, weaker demand from China, or geopolitical flare-ups could throw markets off course. That is why it is important to keep portfolios diversified and anchored in quality businesses instead of trying to nail the perfect timing.
Get Smart: What Investors Should Really Focus On
The STI’s journey from April’s lows to September’s highs is a reminder of how quickly market sentiment can turn.
What looks permanent in the moment rarely is. Quality businesses have a way of working through challenges if you give them time.
It also reinforces the simple but often overlooked truth: staying invested beats trying to guess entry and exit points. Investors who panicked and sold in April missed one of the sharpest rebounds in years. Those who stayed the course with solid companies were rewarded.
At the end of the day, whether the index is at 3,400 or 4,300, Singapore’s world-class banks, essential infrastructure providers, and reliable REITs are still generating cash flow and paying dividends. That fundamental reality does not change just because of a milestone.
Here is my take on this. Instead of watching the daily market numbers, focus on owning businesses that can compound over decades, not months. Stay diversified so you can sleep well at night, but do not let the fear of record highs stop you from participating in Singapore’s long-term growth story.
While it is worth celebrating this milestone, the smartest investors are already thinking about the next decade of opportunities.
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Disclosure: Joanna Sng owns shares of DBS, OCBC, and UOB.
