Week of February 2-6, 2026
Executive Summary
The week of February 2-6, 2026 represents a critical juncture for Singapore’s equity markets as the Straits Times Index (STI) trades near record levels around 4,905 points, having gained 27% year-over-year. This case study analyzes the confluence of global market catalysts—particularly major U.S. tech earnings and the January jobs report—against Singapore’s domestic economic resilience and structural market reforms.
Key takeaways: The STI shows bullish momentum supported by the S$5 billion Equity Market Development Programme (EQDP), strong banking sector fundamentals yielding 5-6% dividends, and GDP growth of 4.8% in 2025. However, the week ahead brings testing conditions with U.S. earnings volatility, Federal Reserve policy uncertainty, and Singapore’s own economic moderation to an expected 1.7-2% growth in 2026.
Market Snapshot (As of January 30, 2026)
| Metric | Value | Change/Context |
| STI Index Level | 4,905 points | -0.51% (Jan 30), +27.21% YoY |
| All-Time High | 4,934 points | Reached Jan 30, 2026 |
| Monthly Performance | +5.57% | Strong January rally |
| 2025 Full Year Return | +23% | Plus ~5% dividend yield |
| Market Cap (Top 3 Banks) | S$180+ billion | ~50% of STI weight |
| EQDP Deployment | S$3.95bn allocated | S$2.85bn batch pending |
| GDP Growth 2025 | 4.8% | Beat expectations |
| GDP Forecast 2026 | 1.7% (median) | Range: 1.0-3.0% |
| MAS Core Inflation 2026 | 1.0-2.0% | Normalizing from lows |
| Unemployment Rate | 2.0% | Stable, Q4 2025 |
I. Global Market Context & Key Events
U.S. Market Catalysts This Week
The week’s primary global driver centers on major U.S. technology earnings and the January employment report, which carry direct implications for Singapore’s tech-heavy and finance-dominant market structure.
1. Major Tech Earnings (Feb 3-5)
Key releases include Alphabet (Feb 4), Amazon (Feb 5), AMD (Feb 3), and Qualcomm (Feb 4). These earnings are critical for Singapore given:
• Tech Sector Exposure: Singapore’s manufacturing sector, particularly semiconductors and electronics, achieved strong growth in 2025 with electronics demand remaining robust. AMD and Qualcomm earnings will signal AI chip demand sustainability.
• Cloud Infrastructure: Alphabet and Amazon results will indicate data center investment trends—critical for Singapore companies like ST Engineering and local REIT sectors exposed to data center facilities.
• Market Sentiment: With concerns about inflated valuations in big tech, weak earnings could trigger global risk-off moves affecting Singapore’s recent rally.
2. U.S. January Jobs Report (Feb 6)
The Friday release is pivotal as December’s weak 50,000 jobs added raised recession concerns. The Federal Reserve, which held rates steady on January 29, is closely monitoring labor market weakness while maintaining elevated inflation concerns.
Singapore Impact: A weaker-than-expected jobs number could accelerate Fed rate cut expectations, supporting Singapore banks through lower funding costs but potentially weakening the USD and affecting Singapore’s exports. Conversely, strong jobs data maintaining higher-for-longer rates would pressure Singapore’s rate-sensitive sectors.
3. Pharmaceutical Earnings
Eli Lilly and Novo Nordisk (both Feb 4) report amid weight-loss drug optimism. While Singapore has limited direct pharma exposure in the STI, these results affect broader healthcare sentiment and potential M&A activity in Asian markets where Singapore-listed healthcare players operate.
Singapore Domestic Factors
1. Monetary Policy Stability
The Monetary Authority of Singapore (MAS) maintained its modest appreciation stance for the S$NEER (Singapore dollar nominal effective exchange rate) in its January 2026 review. Key points:
• No change to the appreciation slope, band width, or center level
• Core inflation forecast: 1.0-2.0% for 2026 (up from 0.5% in 2025)
• GDP growth expected to moderate but remain resilient
• MAS emphasized readiness to respond to risks while maintaining medium-term price stability
2. Economic Transition Dynamics
Growth Moderation: After stellar 4.8% GDP growth in 2025, Singapore expects 1.0-3.0% growth in 2026 (median forecast: 1.7%). This represents one of the sharpest decelerations among developed Asian economies.
Tariff Impact: Despite having a U.S. free trade agreement since 2004, Singapore faces a 10% baseline U.S. tariff implemented in 2025. With trade exceeding 320% of GDP, this creates headwinds for 2026.
Labor Market: Unemployment steady at 2.0%, but business expectations for Q1 2026 show softening hiring intentions. Planned redundancies rose from 1.9% to 2.3% of firms.
Inflation Outlook: Rising risks from higher COE premiums, reduced EV rebates, increased carbon taxes, and wage hikes offset by low global commodity prices.
II. STI Technical & Fundamental Analysis
Current Market Position
The STI’s performance heading into this critical week reflects both structural strength and near-term vulnerability. At 4,905 points (as of January 30), the index sits just below its all-time high of 4,934 reached the same day.
| Valuation Metric | Current | Assessment |
| Forward P/E (FY2026) | 14.3x | In line with 10-year average |
| Price-to-Book | ~1.3x | 8% discount to long-term average |
| Dividend Yield (2026F) | 4.9-5.2% | Attractive vs regional markets |
| ROE (2026F) | 10.6% | Improving from 9.2% (2022) |
| Earnings Growth (2026F) | 8.8% | Banks turn from drag to 5.4% growth |
Analyst Targets & Positioning
| Institution | End-2026 Target | Upside from Current | Key Rationale |
| UOB Kay Hian | 5,000 points | +1.9% | EQDP inflows, 16x P/E not egregious |
| DBS Group Research | 4,880 points | -0.5% | 8.8% earnings growth, 4.5% yield |
| Macquarie | 4,500 points | -8.3% | Bank headwinds, rate compression |
Consensus View: Most analysts expect modest gains to flat performance with total returns (including dividends) in the 3-8% range. The key debate centers on whether banking sector headwinds from margin compression will offset structural support from EQDP and safe-haven flows.
Sector Composition & Drivers
The STI’s heavy concentration in financial services (approximately 50% weight from DBS, OCBC, and UOB) makes banking sector performance the dominant driver, while telecom, real estate, and industrial stocks provide diversification.
Banking Sector (50% of STI)
Strength Factors:
• Robust capital buffers: All three banks maintain CET1 ratios above 15%, well above regulatory requirements
• Attractive yields: FY2026 dividend yields of 5.4-6.1% (DBS 6.1%, OCBC 5.4%, UOB 5.4%)
• Wealth management growth: Fee income rising 15-20% YoY offsetting NIM pressure
• Regional diversification: Strong ASEAN exposure capturing growth
• Asset quality: NPL ratios at historically low levels (0.9-1.6%)
• Excess capital deployment: Potential for general provision writebacks and continued share buybacks
Challenge Factors:
• Net interest margin (NIM) compression: Expected decline from ~2% to 1.75-1.96% range as rates ease
• Net interest income (NII) headwinds: Banks expect FY2026 NII to decline slightly from FY2025 levels
• SORA trajectory: 3M SORA expected to stabilize around 1.25% through 2026, down from peaks
• Deposit repricing pressure: Major cuts of 120-175 bps to flagship accounts completed in 2H2025
Other Key Sectors
Real Estate & REITs: Moderate outlook with single-digit residential price growth expected. Grade A office supply muted for 2-3 years supports select positions. Data center REITs benefit from AI infrastructure demand.
Telecommunications: Singtel and other telecom holdings provide stability with consistent dividends and regional expansion.
Industrials: ST Engineering, Seatrium, and SIA Engineering benefit from defense spending, shipbuilding orders, and aviation recovery.
Consumer: Cautious positioning amid slowing growth but stable labor market supports discretionary spending.
III. Equity Market Development Programme Impact
Programme Structure & Deployment
The S$5 billion EQDP represents the most significant structural intervention in Singapore’s equity market history. Announced as part of comprehensive market reforms in late 2025, the programme aims to address chronic liquidity issues and attract both domestic and foreign capital.
| Component | Amount | Status | Expected Impact |
| First Batch | S$2.05bn | Largely deployed | Contributed to 2025 rally |
| Second Batch | S$2.85bn | Deployment into 1H 2026 | Key support for early 2026 |
| Total Programme | S$5.00bn | S$3.95bn allocated | Focus on small/mid caps |
| Fund Managers | Selected firms | With SG focus mandates | Professional deployment |
Market Impact Channels
1. Direct Capital Inflows
The S$2.85 billion second batch deployment expected in 1H 2026 provides continued buying pressure, particularly important during the week of February 2-6 as global volatility from U.S. earnings could otherwise trigger profit-taking.
Week Impact: If negative U.S. tech earnings materialize, EQDP funds act as a stabilizing force, absorbing sell pressure and limiting downside.
2. Large Cap Spillover Effects
While EQDP targets small and mid-caps, analysts at UOB Kay Hian and DBS believe large caps (STI constituents) benefit through: (a) portfolio rebalancing by fund managers adding Singapore exposure, (b) reduced capital leaving Singapore for other markets, (c) improved market sentiment supporting all segments, and (d) increased trading volumes improving overall liquidity.
3. Complementary Reforms
The EQDP operates alongside structural improvements announced in the Equities Market Review:
• Tax exemptions for qualifying funds investing in Singapore equities
• Listing incentives: 20% corporate tax rebate for new primary listings, 10% for secondary
• Market-making incentives to tighten spreads
• Board lot reduction from 100 to 10 units for securities above S$10
• CDP custody modernization
• Risk-based regulatory approach and potential removal of financial watch-list
Week-Specific Considerations
For the February 2-6 week, EQDP deployment timing becomes critical. If fund managers are actively deploying the second batch, this provides natural bid support that could: (1) limit downside if U.S. earnings disappoint, (2) amplify gains if global sentiment improves post-jobs report, and (3) create relative outperformance versus regional peers lacking similar support mechanisms.
IV. Week-by-Week Outlook (Feb 2-6, 2026)
Monday, February 2
Global Events: ISM Manufacturing PMI (January), Atlanta Fed President Raphael Bostic speaking
Key Earnings: Palantir, Disney, Mizuho Financial
Singapore Focus: Week opens with focus on manufacturing data setting tone for global industrial demand. Singapore’s own manufacturing sector will watch for signs of sustained demand.
Market Expectation: Likely consolidation near highs as investors position for earnings deluge. STI could trade rangebound 4,890-4,920.
Tuesday, February 3
Global Events: Job openings (December JOLTS)
Key Earnings: AMD, Merck, Amgen, Pfizer, PepsiCo
Singapore Impact: AMD results critical for semiconductor/electronics sentiment. Strong AI chip demand would support Singapore tech manufacturing optimism.
Risk Factor: If AMD guidance disappoints on inventory concerns or slowing AI capex, could trigger tech selloff affecting Singapore industrial/tech names.
Wednesday, February 4 – CRITICAL DAY
Global Events: ADP Employment (January), ISM Services PMI, Fed Governor Lisa Cook speaking
Key Earnings: Alphabet, Eli Lilly, AbbVie, Novartis, Novo Nordisk, Uber, Qualcomm
Singapore Impact: This is the week’s most consequential day for Singapore markets:
• Alphabet: Cloud and AI infrastructure spending signals affect data center REIT outlook
• Qualcomm: Mobile and AI chip demand indicator for Singapore electronics sector
• ADP Jobs Preview: First read on January employment ahead of Friday’s official report
Market Scenario: High volatility likely. STI could see +/-1.5% swing depending on Alphabet and ADP results. EQDP buying may cushion downside.
Thursday, February 5
Global Events: Initial jobless claims (week ending Jan 31)
Key Earnings: Amazon, Philip Morris, Shell, ConocoPhillips, Bristol-Myers Squibb
Singapore Focus: Amazon results matter for e-commerce trends affecting regional players and cloud infrastructure (AWS) spending impacting data center investments.
Positioning: Markets begin positioning for Friday’s jobs report. If Wednesday/Thursday data weak, safe-haven flows could benefit Singapore given its stability narrative.
Friday, February 6 – JOBS REPORT DAY
Critical Release: U.S. Employment Report (January)
Other Data: Consumer sentiment (February preliminary), Consumer credit
Key Earnings: Toyota Motors
Singapore Market Impact Analysis:
Scenario 1 – Strong Jobs Report (200K+ jobs, unemployment steady/down):
• Fed rate cut expectations pushed back, USD strengthens
• Singapore banks face continued NIM pressure from higher-for-longer rates
• However, strong U.S. economy supports export demand for Singapore
• STI likely dips 0.5-1% on bank weakness but resilient overall
Scenario 2 – Weak Jobs Report (Sub-100K jobs, rising unemployment):
• Fed cuts accelerate, USD weakens, rates drop
• Singapore banks initially rally on lower funding cost expectations
• But recession fears pressure exporters and industrial stocks
• Safe-haven status could attract flows; STI flat to +0.5%
Scenario 3 – Goldilocks (120-170K range, stable unemployment): Most favorable for Singapore. Gradual Fed easing path supports banks’ NIM normalization while maintaining growth outlook. STI likely closes week +0.8-1.2%.
V. Strategic Solutions & Investment Approaches
For Institutional Investors
1. Core-Satellite Positioning
Core Holdings (60-70%): DBS, OCBC, UOB providing stable 5-6% yields with capital buffers. Add Singtel and select blue-chip REITs for diversification.
Satellite Opportunities (30-40%): Position in EQDP beneficiaries among small/mid-caps. Focus on quality names like iFAST, Nam Cheong, UMS, SIA Engineering that analysts highlight for earnings growth/recovery.
2. Hedging Week Volatility
Given concentrated Wednesday-Friday event risk:
• Consider protective puts on STI ETFs (SPDR STI, Amova STI) for downside protection
• Use February 7 expiry options to minimize time decay while covering key events
• Cost-effective collar strategies: sell out-of-money calls at 5,100 to fund 4,750 puts
3. Sector Rotation Strategy
If Tech Earnings Weak: Rotate from industrials/tech into defensive banks and REITs. Banks offering 6% yields become increasingly attractive if growth stocks falter.
If Tech Earnings Strong: Increase exposure to ST Engineering, Venture Corporation, and other industrial/tech names that benefit from sustained AI capex.
For Retail Investors
1. Dollar-Cost Averaging Approach
This week’s volatility creates opportunities for disciplined accumulation. Split planned investments across Monday (pre-earnings), Wednesday (mid-week), and Friday (post-jobs) to average entry prices and reduce timing risk.
2. Focus on Dividend Champions
With STI near all-time highs, capital appreciation may be limited. Emphasize dividend sustainability:
| Stock | FY2026 Yield | Payout Ratio | Special Features |
| DBS | 6.1% | ~50% + capital return | S$3bn buyback ongoing |
| UOB | 5.4% | ~50% + specials | S$0.50 special paid recently |
| OCBC | 5.4% | 60% (raised) | Strong wealth mgmt growth |
| CapitaLand Ascendas REIT | ~5.0% | 90%+ | Data center exposure |
| Mapletree Logistics Trust | ~5.2% | 90%+ | E-commerce logistics |
3. Avoid Overleveraged Positions
With Wednesday’s Alphabet/Qualcomm and Friday’s jobs report, intraday swings could exceed 1.5%. Retail investors using margin should maintain conservative loan-to-value ratios (max 40-50%) to avoid forced liquidation on volatility.
For Policy Makers & Market Operators
1. Accelerate EQDP Deployment Communication
Market confidence would benefit from transparency on second batch deployment pace. If MAS/SGX can signal active deployment during volatile periods, it would reduce panic selling and support market stability.
2. Market Maker Activation
Ensure market-making incentives are fully operational during the week. Tighter spreads particularly important Wednesday-Friday when global events could cause rapid price moves.
3. Investor Education Campaigns
Use the week’s attention to emphasize Singapore’s structural advantages: safe-haven status, political stability, strong regulatory framework, attractive valuations, and comprehensive market reforms. Counter potential panic with factual communication.
VI. Risk Assessment & Mitigation
Key Risks for the Week
| Risk Category | Probability | Impact | Mitigation Strategy |
| Major tech earnings miss | Medium | High | Diversify beyond tech-sensitive names; EQDP provides floor |
| Weak jobs report triggers recession fears | Medium-Low | High | Safe-haven flows may offset; focus on defensive banks |
| Fed hawkish surprise | Low | Medium | Already priced in; limited downside |
| China economic deterioration | Medium | Medium | Monitor OCBC/UOB exposure; banks have diversified |
| Profit-taking after strong rally | High | Medium | Natural after 27% YoY gain; EQDP absorbs selling |
| Geopolitical escalation | Low | High | Singapore benefits as safe haven |
| U.S. tariff expansion | Medium | Medium-High | Already facing 10% tariff; limited incremental impact |
Structural Singapore-Specific Risks
1. Bank Concentration Risk
With DBS, OCBC, and UOB representing ~50% of STI, any sector-wide shock could severely impact index performance. However, this risk is mitigated by:
• Extremely strong capital positions (15%+ CET1 ratios)
• Diversified revenue streams (50%+ from fees in some cases)
• Low NPL ratios and conservative underwriting
• Regional diversification reducing Singapore-specific exposure
2. External Dependency
Trade exceeding 320% of GDP creates vulnerability to:
• U.S.-China trade tensions
• Global semiconductor cycle downturns
• Tariff escalation (already experiencing 10% U.S. tariff)
• Shipping disruptions or logistics bottlenecks
3. Growth Deceleration Impact
The sharp slowdown from 4.8% (2025) to projected 1.7% (2026) GDP growth could:
• Dampen corporate earnings growth beyond banking sector
• Reduce hiring and wage growth, affecting consumer sectors
• Increase unemployment from current 2% level
• Put pressure on government for additional stimulus (Budget 2026 on Feb 12)
Upside Scenarios & Opportunities
1. EQDP Exceeds Expectations
If the S$2.85 billion second batch deploys more aggressively than expected and includes more large-cap exposure, STI could break above 5,000 earlier than year-end targets suggest.
2. Safe-Haven Premium Expands
Global instability (U.S. recession, geopolitical tensions, China slowdown) paradoxically benefits Singapore as capital seeks stability. The SGD’s defensive characteristics and Singapore’s AAA-equivalent creditworthiness could attract significant inflows.
3. Tech Rally Continues
Strong earnings from Alphabet, Amazon, AMD, and Qualcomm confirming sustainable AI infrastructure spending would support Singapore’s tech manufacturing and data center sectors, driving industrial and REIT outperformance.
4. Bank Margin Stabilization
If 3M SORA stabilizes at 1.25% as DBS economists project rather than continuing to decline, bank NIMs would stabilize sooner than feared, supporting multiple expansion from current 14.3x to 16x+ levels.
VII. Conclusions & Recommendations
Week Outlook Summary
The February 2-6, 2026 week represents a critical inflection point for Singapore markets. Trading near all-time highs with strong fundamental support from the EQDP, robust banking sector dividends, and safe-haven appeal, the STI faces its first major test of 2026 resilience against global macro volatility.
Base Case Scenario (60% probability)
• Mixed U.S. tech earnings with some beats, some misses
• January jobs report in 120-170K range (Goldilocks)
• STI experiences 2-3% intraweek volatility but closes week +0.5% to +1.2%
• Banks outperform on dividend appeal, industrials mixed
• EQDP deployment provides floor around 4,850-4,870 levels
Bull Case Scenario (25% probability)
• Strong tech earnings confirm AI spending sustainability
• Jobs report shows resilient labor market without inflation acceleration
• STI breaks above 5,000 on momentum
• Week closes +2% to +3%
• Sets up strong 1H 2026 as EQDP second batch fully deploys
Bear Case Scenario (15% probability)
• Multiple major tech earnings disappoint on valuation concerns
• Jobs report shows sub-100K with rising unemployment
• Global recession fears trigger risk-off
• STI drops to 4,700-4,750 (-3% to -4%)
• However, safe-haven flows and EQDP support limit further downside
Strategic Recommendations
For Long-Term Investors (12+ months)
1. Maintain Core Positions: Current STI levels around 4,900 are not excessive at 14.3x forward P/E with 4.9-5.2% yields. Keep core bank and blue-chip holdings.
2. Increase on Weakness: If bear scenario materializes and STI drops to 4,700-4,750, this represents attractive entry given EQDP support, dividend yields rising to 5.5%+, and year-end targets at 4,880-5,000.
3. Emphasize Dividends: In a moderating growth environment, focus on sustainable high-yielders. The three banks remain premier choices.
4. Small-Cap Allocation: Allocate 10-20% to quality small/mid-caps benefiting from EQDP. Wait for pullbacks to add positions.
For Tactical Traders (1-3 months)
1. Range Trade: Expect 4,850-4,950 range through February. Buy dips to 4,860-4,880, take profits near 4,930-4,950.
2. Event-Driven Plays: Position lightly into Wednesday Alphabet earnings. If positive, add industrials/tech Thursday morning. If negative, rotate to defensive banks.
3. Friday Jobs Positioning: Reduce risk Thursday afternoon before jobs report. Goldilocks scenario creates best Monday follow-through.
4. Volatility Management: Use STI ETF options for directional plays rather than individual stocks given concentrated event risk.
For Policy & Corporate Leaders
1. Maintain EQDP Momentum: The programme’s success in lifting 2025 performance proves its value. Ensure second batch deployment continues steadily through volatility.
2. Budget 2026 (Feb 12): Use upcoming budget to reinforce support for strategic sectors, innovation, and workforce development. Market expects continuation of business-friendly policies.
3. Corporate Communications: Listed companies should proactively communicate with investors on how they’re navigating the growth slowdown and positioning for opportunities.
4. Regional Narrative: Emphasize Singapore’s stability, governance, and structural reforms versus regional alternatives to maintain capital inflows.
Final Assessment
Singapore’s stock market enters this critical week from a position of strength: record highs, strong fundamentals, unprecedented policy support through the EQDP, and safe-haven appeal. While global event risk from U.S. tech earnings and jobs data creates near-term volatility potential, the structural case for Singapore equities remains intact.
The market has already absorbed significant information: bank margin compression, GDP growth slowdown, and U.S. tariffs are known factors. What remains to be tested is whether global growth concerns will overwhelm Singapore’s defensive characteristics and whether the EQDP can provide the promised market stabilization during stress.
For most investors, the appropriate stance is constructive with defensive hedges. The risk-reward at current levels (14.3x P/E, 4.9% yield, S$5bn EQDP support) favors staying invested while managing position sizing and maintaining dry powder to add on weakness.
The February 2-6 week will likely determine whether the STI can extend its historic rally or needs a consolidation period before the next leg higher toward analyst targets of 4,880-5,000 by year-end. Either outcome validates Singapore’s emergence as a differentiated Asian equity market deserving increased global investor attention.
Disclaimer
This case study is provided for informational and educational purposes only. It does not constitute investment advice, financial advice, trading advice, or any other type of advice. The analysis presented represents opinions based on publicly available information as of February 1, 2026. Past performance is not indicative of future results. All investments carry risk, including the potential loss of principal. Investors should conduct their own research and consult with qualified financial advisors before making investment decisions. Market conditions, economic data, and corporate earnings can change rapidly and may differ materially from projections presented in this