Analyst
Analyst
Highlights
- Singapore equities weakened in Oct 26, with the STI falling 5.3% as investors became more sceptical about AI investment returns following Firmus’ cancelled IPO. Plantation, shipyards, technology and banking stocks led the declines, while land transport and REITs proved relatively resilient.
- Key events included: a) financial markets have become sceptical on investment returns from AI; b) the yield for 10-year Singapore government bonds slipped 23bp to 2.24%; and c) the Fed kept the Fed Funds Rate unchanged at 3.75% on 28 Oct 26.
- Key upcoming events to look out for include: a) the US Midterm Elections, b) ASEAN Summit on 16-18 Nov 26, c) Singapore FinTech Festival on 18-20 Nov, and d) 3Q26 GDP update.
What’s New
- The reality check on AI started when the planned US$5b Australian IPO for Nvidia-backed Firmus was cancelled on 9 Oct 26. Since then, we have seen a series of failed fund-raising exercises, which indicates that financial markets have become more sceptical and circumspect regarding the enormous upfront investment in chips and data centres (DC) incurred to develop AI.
- STI performance. The Straits Times Index (STI) fell heavily by 5.3% mom in Oct 26. Land transport (+0.8%) and REITs (-0.7%) held up, but plantation, shipyards, technology and banks lost 19.5%, 8.8%, 7.1% and 6.4% respectively. The National Environment Agency issued notices to 10 companies, including Wilmar, Bumitama, First Resources and Indofood Agri, under the Transboundary Haze Pollution Act.
- Top outperformers. The top gainers were the Jardine group of companies DFI Retail (DFI, +9.4%), Jardine Matheson (JMH, +8.2%) and Hongkong Land (HKL, +3.1%). S-REITs CapitaLand Int Comm Trust (CICT), Frasers L&C Trust (FLT), Suntec REIT (SUN) and Cent Accom REIT (CAREIT) gained 2.2%, 1.7%, 1.5% and 1.0% respectively.
- Top underperformers. Technology companies CSE Global, UMS, AEM and Frencken lost a hefty 29.4%, 25.8%, 24% and 23.3%, respectively. Plantation companies Bumitama, First Resources and Wilmar declined 26.9%, 25.1% and 16.6% respectively.
- MAS has kept monetary policy unchanged and maintained the prevailing rate of appreciation for the SGD nominal effective exchange rate (S$NEER) policy band at its Oct 26 review, allowing the SGD to strengthen gradually to contain imported inflation. Economic growth remains firm, supported by strong orders for AI products and capacity expansion for the technology sector. MAS forecasts core inflation at 1.5-2.0% and headline inflation at ~2.0% for 2026, with both projected at 1.5-2.5% in 2027. Inflation risks remain tilted upwards, particularly from energy and food prices. MAS expects growth to moderate as the AI investment cycle slows and global financial conditions tighten.
- Singapore’s economy expanded by 5.4% yoy in 3Q26, according to advance estimates, moderating from 6.2% yoy in 2Q26. On a seasonally adjusted qoq basis, GDP grew by 1.1%, easing from 1.5% previously. Manufacturing growth slowed to 7.5% yoy from 12.9%, with gains in electronics, precision engineering and transport engineering outweighing declines in chemicals and biomedical. Construction growth accelerated to 8.8% yoy, supported by higher public and private sector output. Services growth held steady at 5.2%, led by wholesale trade and transport & storage.
Highlights
- Singapore equities weakened in Oct 26, with the STI falling 5.3% as investors became more sceptical about AI investment returns following Firmus’ cancelled IPO. Plantation, shipyards, technology and banking stocks led the declines, while land transport and REITs proved relatively resilient.
- Key events included: a) financial markets have become sceptical on investment returns from AI; b) the yield for 10-year Singapore government bonds slipped 23bp to 2.24%; and c) the Fed kept the Fed Funds Rate unchanged at 3.75% on 28 Oct 26.
- Key upcoming events to look out for include: a) the US Midterm Elections, b) ASEAN Summit on 16-18 Nov 26, c) Singapore FinTech Festival on 18-20 Nov, and d) 3Q26 GDP update.
What’s New
- The reality check on AI started when the planned US$5b Australian IPO for Nvidia-backed Firmus was cancelled on 9 Oct 26. Since then, we have seen a series of failed fund-raising exercises, which indicates that financial markets have become more sceptical and circumspect regarding the enormous upfront investment in chips and data centres (DC) incurred to develop AI.
- STI performance. The Straits Times Index (STI) fell heavily by 5.3% mom in Oct 26. Land transport (+0.8%) and REITs (-0.7%) held up, but plantation, shipyards, technology and banks lost 19.5%, 8.8%, 7.1% and 6.4% respectively. The National Environment Agency issued notices to 10 companies, including Wilmar, Bumitama, First Resources and Indofood Agri, under the Transboundary Haze Pollution Act.
- Top outperformers. The top gainers were the Jardine group of companies DFI Retail (DFI, +9.4%), Jardine Matheson (JMH, +8.2%) and Hongkong Land (HKL, +3.1%). S-REITs CapitaLand Int Comm Trust (CICT), Frasers L&C Trust (FLT), Suntec REIT (SUN) and Cent Accom REIT (CAREIT) gained 2.2%, 1.7%, 1.5% and 1.0% respectively.
- Top underperformers. Technology companies CSE Global, UMS, AEM and Frencken lost a hefty 29.4%, 25.8%, 24% and 23.3%, respectively. Plantation companies Bumitama, First Resources and Wilmar declined 26.9%, 25.1% and 16.6% respectively.
- MAS has kept monetary policy unchanged and maintained the prevailing rate of appreciation for the SGD nominal effective exchange rate (S$NEER) policy band at its Oct 26 review, allowing the SGD to strengthen gradually to contain imported inflation. Economic growth remains firm, supported by strong orders for AI products and capacity expansion for the technology sector. MAS forecasts core inflation at 1.5-2.0% and headline inflation at ~2.0% for 2026, with both projected at 1.5-2.5% in 2027. Inflation risks remain tilted upwards, particularly from energy and food prices. MAS expects growth to moderate as the AI investment cycle slows and global financial conditions tighten.
- Singapore’s economy expanded by 5.4% yoy in 3Q26, according to advance estimates, moderating from 6.2% yoy in 2Q26. On a seasonally adjusted qoq basis, GDP grew by 1.1%, easing from 1.5% previously. Manufacturing growth slowed to 7.5% yoy from 12.9%, with gains in electronics, precision engineering and transport engineering outweighing declines in chemicals and biomedical. Construction growth accelerated to 8.8% yoy, supported by higher public and private sector output. Services growth held steady at 5.2%, led by wholesale trade and transport & storage.
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
Our latest research
Strategy
27 Oct 2026
Strategy – SMID Cap Corporate Day: Key Takeaways – Construction Upcycle Remains Intact
Strategy
20 Oct 2026
Strategy – SMID-Cap Outlook: SMID-Cap Retail Webinar Takeaway: Identifying Opportunities Amid Market Weakness
Strategy
5 Oct 2026