17–20 March 2026 | Weekly Investment Commentary on SGX Straits Times Index Constituents
Disclaimer: This commentary is for informational and educational purposes only and does not constitute financial advice. Investors should conduct their own due diligence or consult a licensed financial adviser before making any investment decisions. Past performance is not indicative of future results.
Market Overview: A Week of Cautious Gains and Sharp Divergences
The Straits Times Index (STI) closed the trading week of 17 to 20 March 2026 on a mixed note, with the SPDR Straits Times Index ETF edging up marginally from $4.923 to $4.950, representing a gain of approximately 0.55 per cent. This modest advance, however, masks a pronounced divergence across sectors and individual counters. The Excel data covering the four trading days reveals that while a majority of STI constituents registered small positive movements, a handful of stocks suffered notable declines, suggesting that investors remain selective and cautious in their positioning.
The broader context for this week’s trading is framed by two dominant macro forces: the ongoing fallout from the 2026 Iran conflict, which erupted on 28 February when joint US-Israeli airstrikes targeted Iranian leadership and military infrastructure, and the continuing overhang of US trade tariffs imposed under Section 122, which took effect on 24 February at a baseline rate of 10 per cent on all countries including Singapore. These twin headwinds have injected significant uncertainty into global markets, and Singapore’s open, trade-dependent economy finds itself squarely in the crosshairs of both.
The Shadow of War: How the Iran Conflict Shapes STI Stocks
The US-Israeli strikes on Iran and the subsequent partial disruption of the Strait of Hormuz — through which roughly 20 per cent of global oil supplies transit — sent Brent crude oil prices surging past $100 per barrel in early March, the highest since August 2022. Although prices have since moderated somewhat, they remain elevated, and the threat of further escalation continues to weigh on investor sentiment across Asia. For Singapore, a city-state that imports virtually all its energy needs and depends significantly on Qatari LNG, the conflict poses particular risks to inflation, transport costs and corporate margins.
The Excel data shows that Sembcorp Industries emerged as the week’s standout performer, gaining 5.13 per cent from $5.85 to $6.15. This comes as no surprise. Sembcorp’s diversified energy portfolio, which spans gas, renewables and integrated urban solutions, positions the company to benefit from elevated energy prices. DBS Group Research maintained a “buy” rating on Sembcorp in early March, and the company refuted reports that its Fujairah 1 plant in the UAE had been damaged by the conflict. Analysts at multiple brokerages have a consensus target price of around $6.78 to $7.10, implying further upside from current levels.
Conversely, Singapore Airlines held relatively flat at $6.60, up a marginal 0.15 per cent despite the severe disruption to Middle Eastern airspace. OCBC Group Research noted that higher oil and insurance prices may pressure margins for carriers such as Singapore Airlines, with prolonged airspace closures leading to longer flight times and increased fuel burn. The airline’s muted price action suggests the market has largely priced in these headwinds, though further escalation could trigger a more pronounced sell-off.
The three Singapore banks — DBS, OCBC and UOB — posted modest gains for the week, rising 0.56 per cent, 1.28 per cent and 0.81 per cent respectively. While the banks’ direct exposure to the Iran conflict is limited, analysts have flagged that elevated energy costs feeding through to corporate earnings pressure across the region could result in a deterioration of credit quality in trade finance and SME lending over time. That said, all three banks reported contained non-performing loan ratios in their most recent results (DBS at 1.0 per cent, OCBC at 0.9 per cent, UOB at 1.5 per cent), and their robust capital buffers provide a meaningful cushion against near-term shocks.
Trade Tariffs: The Other Headwind
Adding to the geopolitical uncertainty is the continuing US tariff regime. On 20 February 2026, the US Supreme Court struck down the earlier “reciprocal” tariffs imposed under the International Emergency Economic Powers Act (IEEPA), but a replacement 10 per cent baseline tariff under Section 122 took effect almost immediately on 24 February. Singapore’s Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong cautioned that the tariffs would have a significant impact on Singapore’s economy, warning households and businesses to prepare for rough waters ahead. More recently, on 11 March, the US Trade Representative launched new Section 301 investigations targeting 16 economies including Singapore, raising the spectre of additional tariff escalation.
Against this backdrop, Singapore’s government may downgrade its full-year GDP growth forecast of 1 to 3 per cent, although officials have stressed the need for careful assessment before revising projections. The immediate direct impact of the 10 per cent tariff on Singapore’s exports is expected to be manageable, given that this rate is broadly unchanged from the previous IEEPA tariff. However, the broader concern, as Prime Minister Lawrence Wong noted in his ministerial statement, is the risk of a tit-for-tat global trade war that could fracture the rules-based trading system Singapore depends on.
Sector-by-Sector Analysis: What the Data Reveals
Financial Services: Steady but Watchful
The banking trio of DBS, OCBC and UOB collectively represent the heaviest weighting in the STI, and their performance this week was quietly reassuring. DBS traded in a narrow range between $57.08 and $57.76 before settling at $57.40, while OCBC climbed from $21.10 to $21.37. UOB rose from $36.88 to $37.18. All three counters trade near their 52-week highs, with OCBC just 2.0 per cent below its peak and DBS 4.3 per cent off. Their forward dividend yields remain attractive, ranging from 3.8 per cent (UOB) to 5.3 per cent (DBS), underpinning their appeal in a flight-to-safety environment. Singapore Exchange (SGX) also advanced 1.21 per cent to $19.28, benefiting from higher trading volumes driven by the current market volatility.
Real Estate and REITs: A Split Picture
The real estate sector presented the most divergent picture of the week. On one hand, Keppel DC REIT gained 1.76 per cent to close at $2.31, continuing its steady upward trajectory on the back of strong fundamentals. The trust reported record FY2025 distribution per unit growth of 7.1 per cent, achieved a remarkable 45 per cent positive rental reversion, and maintained high occupancy at 95.8 per cent. CGS International raised its target price to $2.63, citing Singapore’s booming data centre market and the trust’s robust acquisition pipeline. On the other hand, Hongkong Land plunged 6.85 per cent to $8.02 — the week’s second-worst performer — weighed down by its ex-dividend date on 19 March and broader weakness in Hong Kong’s commercial property market. Jardine Matheson similarly fell 2.65 per cent. Several Mapletree REITs also weakened, with Mapletree Pan Asia Commercial Trust dropping 2.19 per cent and Mapletree Logistics Trust dipping 0.82 per cent, reflecting caution around interest rate-sensitive names given the Iran conflict’s inflationary implications.
Industrials and Aerospace and Defence: Beneficiaries of Uncertainty
Yangzijiang Shipbuilding advanced 1.52 per cent to $4.02, supported by strong order book visibility extending into 2027 and structural demand for clean energy vessels including LNG carriers. DBS maintains a “buy” on the counter following its announcement of plans to acquire a 10 per cent stake in Seaspan parent Poseidon. Singapore Technologies Engineering (ST Engineering), despite slipping 0.36 per cent to $10.94 on the week, remains a key beneficiary of the global rearmament trend. The company reported FY2025 earnings of $850.8 million (excluding one-off items) on 13 March, and OCBC Group Research recommends ST Engineering as a preferred name levered to aerospace, defence and MRO upcycles. SATS gained 1.37 per cent to $3.70, with analysts noting the company could benefit from redirected trade flows arising from the Middle Eastern disruption.
Telecommunications and Utilities: Defensive Anchors
Singtel advanced 0.77 per cent to $5.21, trading at its highest levels in years and just 1.1 per cent from its 52-week high. JPMorgan maintained an “overweight” rating as the company commenced share buybacks early. Singtel’s underlying net profit for the first half of FY2026 rose 14 per cent year-on-year, and its pivot towards digital infrastructure and data centres through Nxera has reinvigorated investor interest. In the flight to safety triggered by tariffs and geopolitical tensions, Singapore’s telecoms, industrials and utilities stocks have attracted the most institutional money, according to Reuters. Sembcorp Industries, as discussed, led the utilities segment with its 5.13 per cent gain.
Consumer Defensive and Cyclical: Under Pressure
DFI Retail Group was the week’s worst performer, tumbling 6.17 per cent from $4.70 to $4.41. The Jardine Matheson-linked grocery and convenience retailer appears to be suffering from broader conglomerate weakness and profit-taking after its strong rally over the past 12 months (up 96 per cent on the year). Thai Beverage and Wilmar International also declined, losing 1.14 per cent and 2.06 per cent respectively, as consumer defensive names with significant exposure to Southeast Asian supply chains came under pressure from rising energy and input costs. Genting Singapore held flat at $0.68, trading near its 52-week low and reflecting subdued tourism sentiment amid the Middle Eastern airspace closures.
Core-Satellite Portfolio Picks for the Coming Weeks
Based on the analysis of the Excel data and the prevailing macroeconomic conditions, the following core-satellite framework may be considered by investors seeking to position for the coming weeks. This is not a recommendation to buy or sell, but rather an analytical framework based on observable data trends, valuation metrics and the current geopolitical environment.
Core Holdings: Stability, Yield and Resilience
DBS Group Holdings (D05.SI) remains the anchor of any Singapore-focused portfolio. Trading at a forward PE of 13.88 with a forward dividend yield of 5.33 per cent, DBS offers the best combination of earnings visibility, capital return and defensive positioning among the three banks. Its proximity to the 52-week high (just 4.3 per cent below) signals sustained institutional demand.
OCBC (O39.SI) offers the most attractive entry point among the banks, trading just 2.0 per cent from its 52-week high with a forward PE of 11.97 — the lowest among the three lenders. Its consistent earnings growth (3.7 per cent in the latest quarter) and well-contained credit risks make it a reliable core holding. Investors who prefer a slightly lower price point relative to DBS may find OCBC appealing.
Singapore Telecommunications (Z74.SI) has re-emerged as a core defensive name. Trading within 1.1 per cent of its 52-week high with 14 per cent underlying profit growth and an active share buyback programme, Singtel benefits directly from the flight-to-safety trade that has characterised the market response to US tariffs and the Iran conflict. Its expansion into data centres and digital infrastructure provides a growth catalyst beyond its traditional telco business.
Satellite Holdings: Growth, Thematic and Opportunistic
Sembcorp Industries (U96.SI) stands out as the primary beneficiary of the elevated energy price environment. With a forward PE of just 10.10, a dividend yield of 4.07 per cent and strong analyst consensus pointing to a target of $6.78 to $7.10, Sembcorp offers asymmetric upside if oil prices remain elevated or escalate further. However, the stock’s 22.5 per cent distance from its 52-week high suggests the market has been slow to fully price in its energy tailwinds, presenting a potential opportunity.
Keppel DC REIT (AJBU.SI) provides exposure to the structural data centre growth theme that is largely insulated from both the trade war and the Iran conflict. With record rental reversions of 45 per cent, expanding assets under management and a target price of $2.63 (representing approximately 14 per cent upside), it offers a compelling growth-yield combination in a segment where demand continues to outstrip supply.
Yangzijiang Shipbuilding (BS6.SI) trades at an undemanding forward PE of 8.04 with a forward dividend yield of 2.99 per cent, supported by a robust order book and structural demand for LNG carriers and clean energy vessels. The company’s strong earnings growth (25.1 per cent) and high return on equity (29.4 per cent) make it one of the most capital-efficient names on the STI. Investors with a higher risk tolerance may find the counter attractive as a proxy for the global energy transition and shipbuilding supercycle.
Singapore Technologies Engineering (S63.SI) merits a satellite position as a long-term beneficiary of the global defence upcycle. While its trailing PE of 72.93 appears elevated due to one-off charges, its forward PE of 28.80 is more reflective of underlying earnings power. OCBC Group Research identifies ST Engineering as a preferred name levered to the aerospace, defence and MRO sectors, and the Iran conflict only reinforces the structural case for increased defence spending across the region.
Stocks to Watch with Caution
Hongkong Land and DFI Retail Group, both linked to the Jardine Matheson conglomerate, suffered the sharpest declines of the week. While Hongkong Land trades at a deeply discounted price-to-book of 0.56, its heavy exposure to Hong Kong’s commercial property market and the challenges facing the sector suggest that value alone may not be sufficient to trigger a near-term recovery. Investors should monitor its upcoming results and capital recycling initiatives before considering entry. DFI Retail Group’s 6.17 per cent weekly decline is notable given the stock’s strong 12-month performance; this may represent profit-taking rather than a fundamental deterioration, but the elevated PE of 25.94 warrants caution.
City Developments Limited also fell 2.09 per cent despite trading at an apparently cheap PE of 12.38 and a price-to-book ratio of 0.81. The stock’s high beta relative to interest rate movements and property cycle concerns may limit near-term upside, though it remains worth monitoring for contrarian value investors should macroeconomic conditions stabilise.
Outlook: Navigating Uncertainty with Discipline
The week of 17 to 20 March 2026 reinforces a market narrative that has been building since the Iran conflict began and US tariffs took effect: investors are rewarding defensive quality, yield and structural growth themes while punishing cyclical, property-heavy and geographically concentrated names. The STI’s composition, which is heavily weighted towards banks, telecoms and industrials, provides a natural defensive tilt that has served investors well in this environment — the benchmark remains up over 26 per cent on the year even after the recent pullback from its 12 February record high of 5,016.
Looking ahead, the key risk factors to monitor include the trajectory of oil prices (particularly whether the Strait of Hormuz disruptions worsen or ease), the outcome of the US Section 301 investigations targeting Singapore, and the broader question of whether the Iran conflict escalates into a wider regional war. OCBC Group Research maintains an overweight position on Singapore equities, viewing the market as a potential safe haven amid global geopolitical tensions. CGS International’s Singapore market strategy notes that the STI trades at 14.7 times forward PE with projected earnings growth of 8.1 per cent for CY2026, suggesting reasonable valuations relative to the quality on offer.
For investors, the discipline of holding a diversified core-satellite portfolio anchored in banks, telecoms and utilities, supplemented by thematic positions in energy, data centres, defence and shipbuilding, appears well suited to the current environment. The flight to safety favouring Singapore’s high-yield, defensive market is likely to persist for as long as the twin headwinds of war and tariffs remain unresolved. Patience, selectivity and a focus on fundamentals will be the watchwords in the weeks ahead.
