N※N

Singapore stocks rise as investors react to growth forecast

  //stocks-investing.news-articles.net/content/202 .. -rise-as-investors-react-to-growth-forecast.html
  Published in Stocks and Investing on Tuesday, September 23rd 2025 at 10:43 GMT by The Straits Times
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

Singapore Stocks Rise as Investors React to Optimistic Growth Forecast

The Singapore Exchange (SGX) Composite Index surged on Tuesday as traders responded to a positive outlook from the Monetary Authority of Singapore (MAS). The market rally, which lifted the index by 1.2 % to 5,352 points, reflected a growing confidence in the country’s economic trajectory, spurred by the MAS’s newly released growth forecast for the next two years. The announcement came amid a backdrop of global uncertainty, yet local fundamentals continue to paint a rosy picture for the city-state’s resilient economy.

The MAS Growth Forecast: A Benchmark of Confidence

The MAS, in its mid‑year review, projected Singapore’s gross domestic product (GDP) to grow at an annualized rate of 3.1 % in 2025 and 3.5 % in 2026—the highest growth estimates since the financial crisis. The central bank cited a confluence of factors that underpin this optimism: robust domestic demand, a rebound in services and manufacturing output, and a sustained improvement in global trade conditions. It also highlighted the strengthening of the Singapore Dollar (SGD), which had steadied after a period of volatility driven by US policy shifts and global supply‑chain disruptions.

In a statement released alongside the forecast, MAS’s Deputy Governor, Ms. Chew L. N., noted that “the outlook reflects confidence in the resilience of Singapore’s economy and the effectiveness of the country’s policy tools.” She added that the projected growth would likely be supported by a continued emphasis on technology‑driven innovation, sustainable infrastructure projects, and an expanding digital economy.

Market Reactions Across Sectors

Financials – Banks and insurers led the rally. DBS Group Holdings, the largest bank in the region, posted a 1.8 % rise, buoyed by expectations of higher loan growth and a stable interest‑rate environment. Singapore’s other banking giants, OCBC and UOB, also posted gains, with investors pointing to the MAS’s unchanged policy rate at 0.75 % as an anchor for financial stability.

Consumer Discretionary – Retail and hospitality stocks rallied, driven by the forecast’s implication of a stronger consumer spending environment. Singapore Airlines’ shares climbed 1.6 %, reflecting confidence in the tourism sector as travel restrictions ease and global confidence returns. Similarly, property developers such as CapitaLand and Keppel Corporation saw their shares climb 1.4 % each, as demand for office and residential spaces is expected to pick up.

Industrials & Manufacturing – Industrial stocks posted healthy gains, with a 1.5 % rise in the sector’s weighted average. The MAS forecast highlighted a rebound in manufacturing output, underscoring the importance of Singapore’s position as a global logistics and high‑tech manufacturing hub.

Technology & Innovation – Companies in the technology space benefitted from the MAS’s emphasis on the digital economy. Singapore’s local start‑up ecosystem continues to attract investment, and larger tech firms such as Sea Ltd. and Grab Holdings experienced upticks, reflecting a positive sentiment about long‑term growth prospects.

Key Takeaways for Investors

1. Strong Domestic Demand – The MAS forecast is underpinned by robust domestic consumption, with the services sector, which accounts for a significant share of Singapore’s GDP, expected to expand by 3‑4 % in 2025.

2. Stable Monetary Policy – The policy rate is likely to remain steady for the foreseeable future, creating an environment conducive to borrowing and investment. Investors see this as a favorable backdrop for banks and real‑estate companies.

3. Global Trade Recovery – A gradual return to pre‑pandemic trade patterns, bolstered by easing US‑China tensions and the revival of global supply chains, will help sustain manufacturing growth.

4. Potential Risks – While the outlook is positive, the MAS cautioned about risks such as commodity price volatility, a potential slowdown in global demand, and the impact of foreign exchange fluctuations. Investors should monitor these factors closely.

Contextualizing the Forecast

The MAS’s forecast aligns with the Singapore government’s own economic plans. In the “Singapore Economic Report 2024,” the Ministry of Trade and Industry projected a similar growth range, citing an increase in productivity and a rising talent pool. Analysts suggest that the forecast may act as a catalyst for further capital inflows, as foreign institutional investors seek exposure to a resilient Southeast Asian economy.

Additionally, the MAS’s forecast has implications for the regional market. The S&P ASEAN Composite Index, which tracks the performance of key ASEAN economies, recorded a 0.9 % gain, reflecting the spill‑over effect of Singapore’s positive outlook. The benchmark’s upward movement indicates that other ASEAN markets may also benefit from improved investor sentiment.

Looking Ahead

While the MAS’s forecast sets a positive tone, investors are advised to keep a watchful eye on upcoming data releases. Key metrics to monitor include the Consumer Confidence Index, business investment figures, and global manufacturing PMI data. The MAS will likely reassess its outlook in its next quarterly review, taking into account any unforeseen macroeconomic shifts.

In summary, Singapore’s stock market rally was a direct response to an optimistic growth forecast from the MAS. The forecast, which anticipates a 3.1 % expansion in 2025 and a 3.5 % rise in 2026, underscores the resilience of the local economy and the effectiveness of its monetary policy framework. With robust domestic demand, a stable policy rate, and a recovering global trade environment, investors seem to be rallying behind a forward‑looking Singapore that is poised to deliver sustained growth.