Between Oil Shocks and Opportunity: A Weekly Review of STI Stocks Amid War and Trade Headwinds

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.

If you want to do your own analysis, you can get the data I used for the price of a cup of kopi!  Here:

👉 Time-Saver! Precompiled SGX STI Companies Stocks Statistics

War, Oil and Resilience: A Weekly Review of SGX STI Stocks for 9–13 March 2026

A Turbulent Week Opens with a Sharp Sell-Off

The week of 9 to 13 March 2026 proved to be a defining stretch for Singapore equities, as the Straits Times Index weathered significant volatility driven by the escalating conflict between the United States, Israel and Iran. The Excel data covering four trading days — 9, 10, 11 and 13 March — reveals that the STI opened the week under severe pressure, with the index sliding 2.1% on Monday 9 March amid a broad sell-off that saw decliners outnumber advancers by more than five to one. The SPDR STI ETF (ES3.SI) reflected this trajectory, moving from $4.75 on 9 March to $4.836 by 13 March, recovering approximately 1.8% over the course of the week despite the persistent geopolitical headwinds.

The sell-off on 9 March was triggered by a confluence of factors. Over the preceding weekend of 28 February 2026, the United States and Israel had launched coordinated military strikes on Iran, a campaign that rapidly escalated into a wider confrontation. Iran retaliated by effectively closing the Strait of Hormuz, a critical maritime chokepoint through which approximately 20% of global oil supplies transit daily. By 12 March, Brent crude had surged above $100 per barrel for the first time since August 2022, after Iran's new supreme leader Mojtaba Khamenei pledged to keep the Strait shut as a "tool of pressure." The International Energy Agency described the situation as creating "the largest supply disruption in the history of the global oil market," with an estimated 10 million barrels per day of crude and other oil products cut off from global markets.

Price Movements Across the STI Constituents

An analysis of the Excel data across the four trading days reveals a wide dispersion in stock performance. Despite the dramatic macro backdrop, the majority of STI component stocks managed to post positive returns over the week. Of the 30 STI constituents tracked, 23 finished the period in positive territory, four were flat, and only three declined.

The standout performer was Hongkong Land, which surged 10.4% over the week. This was followed by DFI Retail Group at 9.8% and Wilmar International at 7.7%. These gains suggest that investors were rotating into names perceived as beneficiaries of supply-chain disruptions and commodity-linked tailwinds. Wilmar, in particular, stands to benefit from elevated commodity prices given its position in the agri-food value chain, and its share price touched its 52-week high during the period.

At the other end, Yangzijiang Shipbuilding fell 2.9%, the sole notable decliner among the industrials. Despite its strong fundamentals — the stock trades at a forward price-to-earnings ratio of just 8.0 and boasts the highest return on equity in the STI at 29.4% — the sell-off may reflect profit-taking after its strong run over the past year, where it has gained over 120% from its 52-week low.

The Banking Sector: Steady Amid the Storm

Singapore's three banking giants provided a reassuring anchor for the market during the week. The Excel data shows DBS rising from $54.31 to $55.31 (+1.8%), UOB from $35.51 to $36.16 (+1.8%), and OCBC from $20.46 to $20.63 (+0.8%). Notably, all three banks peaked on 10 March before pulling back slightly, suggesting a pattern of initial bargain-hunting followed by some caution as the oil crisis deepened.

The banks continue to offer compelling dividend yields. At their 13 March prices, DBS offers a forward yield of approximately 5.5%, UOB around 4.8%, and OCBC approximately 4.1%. DBS has committed to maintaining its quarterly capital return dividend of $0.15 per share through to FY2027, which provides income investors with a degree of certainty even in volatile markets. All three banks maintain non-performing loan ratios near historic lows, though any prolonged economic deterioration from the energy crisis could test these levels.

A key consideration for the banks in the coming weeks is the impact of higher oil prices on inflation expectations. If the Strait of Hormuz disruption persists and oil stays above $100, the Monetary Authority of Singapore may find itself navigating between supporting growth and containing imported inflation, which could complicate the rate-cut trajectory that consensus had previously expected.

Defence and Aerospace: The War Premium Takes Hold

The defence-adjacent stocks within the STI presented an interesting picture during the week. ST Engineering, Singapore's premier defence and aerospace conglomerate, rose from $10.73 to $10.88, a gain of 1.4%. However, the day-by-day data reveals a more dramatic intraday story: ST Engineering spiked to $11.09 on 11 March — a sharp mid-week jump that coincided with Iran's attacks on commercial tankers — before retreating by 13 March. This pattern mirrors what analysts describe as a "defence premium" that the market has been assigning to the stock since the conflict began.

ST Engineering's fundamentals remain robust. The company reported FY2025 core profit growth of 21% and holds a record order book of $33.2 billion, of which $9.9 billion is earmarked for delivery in the current financial year. The company's president for defence and public security has stated publicly that the structural shift in global defence spending is unlikely to wane even if current conflicts subside, noting NATO members' commitment to raise defence spending to 5% of GDP by 2035. Singapore's own Budget 2026 allocated $19.7 billion — approximately 3% of GDP — to defence, a 6.4% increase from the previous year.

However, the Excel data shows that ST Engineering's valuation is stretched. The stock trades at a trailing price-to-earnings ratio of 72.5 and a forward price-to-earnings of 28.7, with analyst consensus target prices averaging $10.84 — essentially flat against the 13 March closing price. For investors, this suggests that the defence premium may already be fully priced in, making it a "hold" rather than a fresh "buy" at current levels.

Seatrium, the offshore and marine engineering firm, posted a solid 3.95% gain for the week, rising from $2.28 to $2.37. Higher oil prices directly benefit Seatrium's order pipeline, as elevated energy prices incentivise upstream exploration and production activity. The stock trades at a forward price-to-earnings of 14.5 and has an analyst consensus target of $2.69, implying roughly 14% upside from its 13 March close.

The Effects of War on STI Stocks

The conflict between the US-Israel coalition and Iran has produced multifaceted effects across the STI. The Excel data, read alongside news reports, allows the identification of several transmission channels through which the war has impacted Singapore-listed equities.

The most direct channel is the oil price shock. With Brent crude soaring from approximately $70 before the conflict to above $100 by 13 March, energy-sensitive stocks have been whipsawed. Sembcorp Industries, which operates power generation and utility assets, rose 1.2% over the week. While higher energy prices can support Sembcorp's upstream activities, they also raise input costs for its power generation business, creating an ambiguous net effect. Seatrium, as noted, benefits more directly from oil prices, while Singapore Airlines faces significant headwinds from rising jet fuel costs and the disruption to Middle Eastern airspace — though SIA still managed a modest 0.8% gain, supported by the fact that OCBC Research has identified SATS as a potential beneficiary from redirected trade flows.

The second channel is the safe-haven trade. OCBC Group Research has maintained an overweight position on Singapore equities, viewing the city-state as a potential safe haven amid global geopolitical tensions. This assessment appears to have supported the Singapore market's relative resilience compared to the steep declines seen on Wall Street, where the S&P 500 and Nasdaq experienced their sharpest weekly falls in over two years. Singapore's strong fiscal position, stable currency, and well-capitalised banking sector make it an attractive destination for capital fleeing uncertainty.

The third channel is the inflationary impulse. Higher oil prices threaten to pass through to consumer prices and corporate margins across the board. For REITs, which dominate the real estate sector of the STI, rising costs could pressure margins, though the data shows that most REITs held steady or posted modest gains. CapitaLand Integrated Commercial Trust rose 1.3%, while Mapletree Industrial Trust gained 1.0%. The higher-yielding REITs — Frasers Logistics and Commercial Trust (forward yield of 6.4%), Mapletree Industrial Trust (6.6%), and Mapletree Logistics Trust (5.8%) — may attract income-seeking investors if bond yields remain unattractive.

Identifying Stocks That May Rise in the Coming Weeks

Based on the trends observed in the Excel data, combined with analyst consensus targets and the prevailing macro backdrop, several stocks appear positioned for potential gains in the near term.

Stocks trading at a meaningful discount to their analyst consensus target price, with supportive fundamentals, include CapitaLand Investment (+22.8% upside to target), CapitaLand Ascendas REIT (+25.5%), Genting Singapore (+27.3%), SATS (+21.7%), and Sembcorp Industries (+17.5%). Amongst these, Sembcorp and SATS stand out as having the clearest catalysts: Sembcorp benefits from higher energy prices and its utilities transition story, while SATS may gain from redirected global trade flows as the Middle Eastern disruption reshapes logistics patterns.

In the banking sector, DBS retains the strongest growth narrative, supported by its digital leadership, record assets under management of $488 billion, and clear dividend guidance. UOB, trading at the lowest price-to-book multiple among the three banks at around 1.2 times, may appeal to value-oriented investors seeking a margin of safety.

Core and Satellite Portfolio Picks

Given the current environment of heightened geopolitical risk, elevated oil prices and persistent market volatility, a core-satellite approach remains prudent for investors constructing a Singapore-focused equity portfolio.

Core Holdings (Stability, Income, Lower Volatility)

DBS Group (D05.SI) forms the natural anchor of any Singapore equity portfolio. With a forward price-to-earnings of 13.4, a forward dividend yield of approximately 5.5%, and a return on equity of 15.9%, DBS combines income generation with earnings resilience. Its commitment to maintaining the capital return dividend through FY2027 provides a visible income floor.

OCBC (O39.SI) complements DBS as a value-oriented banking pick, trading at a price-to-book of 1.5 times — below DBS's premium multiple of 2.3 times — and offering a forward yield of around 4.1%. Its strong wealth management platform and conservative credit stance offer defensiveness in uncertain times.

Singapore Exchange (S68.SI) benefited from the surge in trading volumes during the week, rising 5.1%. As a pure-play beneficiary of market volatility and the structural growth in ETF and derivatives trading, SGX offers a non-cyclical exposure within the financial services sector. Its return on equity of 30.1% is among the highest in the STI.

Singapore Telecommunications (Z74.SI) serves as a defensive income anchor, with its telecommunications infrastructure providing recession-resistant cash flows and a forward yield of approximately 2.6%. At $4.96, it trades close to its 52-week high, reflecting the market's recognition of its defensive qualities.

Satellite Holdings (Higher Growth, Higher Risk)

Seatrium (5E2.SI) is positioned as a direct beneficiary of elevated oil prices and the global energy transition. The company reported a doubling of its net profit for FY2025 on the back of the global energy boom, underscoring the favourable operating environment. Its forward price-to-earnings of 14.5 and analyst target of $2.69 (13.6% upside) make it an attractive play on the energy upcycle. The stock's low beta of 0.32 suggests it is less volatile than the broader market, though investors should note it does not yet pay a meaningful dividend.

Sembcorp Industries (U96.SI) offers exposure to both the energy price rally and the clean energy transition. With a forward price-to-earnings of 9.5 — among the lowest in the STI — and an analyst target of $6.78 (17.5% upside), it represents value within the utilities space. Its forward dividend yield of 4.3% adds an income component. Notably, DBS Research has reiterated a "Buy" call with a target price of $7.30, highlighting that Sembcorp's Singapore operations are largely protected by long-term contracts with cost pass-throughs and active hedging, meaning the company is well-positioned to benefit from higher gas prices and volatility without bearing the full brunt of input cost inflation. Lim and Tan Securities has separately issued a bullish short-term technical outlook on the stock, identifying near-term resistance at $6.04 and support at $5.60.

SATS (S58.SI) stands to benefit from the restructuring of global logistics networks as the Middle Eastern disruption reshapes air cargo and ground handling flows. With a forward price-to-earnings of 16.7 and analyst target of $4.40 (21.7% upside), it is positioned as a recovery play on the aviation sector's long-term growth.

Keppel (BN4.SI) rounds out the satellite portfolio as a diversified industrial play with exposure to infrastructure, data centres and asset management. At a forward price-to-earnings of 19.5 and with 8.4% upside to analyst targets, Keppel offers balanced exposure to multiple secular growth themes.

Volume Trends and Market Sentiment

The Excel data reveals a notable decline in trading volumes between 9 March and 13 March for most stocks. The SPDR STI ETF saw its volume drop by 85% over the period, from 6.6 million shares to just under 1 million. This suggests that the initial wave of panic selling on 9 March gave way to a more cautious, lower-volume recovery as traders adopted a wait-and-see posture. However, certain stocks bucked the trend: ST Engineering's volume rose 20%, Hongkong Land's rose 13%, and DFI Retail's rose 4%, indicating active accumulation in these names.

Outlook for the Coming Weeks

The trajectory of the STI in the coming weeks hinges almost entirely on the resolution — or prolongation — of the Strait of Hormuz crisis. If the waterway reopens swiftly through diplomatic or military means, the oil price premium will unwind rapidly, relieving pressure on inflation-sensitive stocks and potentially triggering a relief rally across the broader index. In this scenario, the banks, REITs and consumer stocks would stand to benefit disproportionately.

If the blockade persists, however, the IEA has warned that supply losses are set to increase further, and Goldman Sachs has raised the probability of a US recession this year to 25%. In such a scenario, defensive names — the banks for their dividends, Singtel for its resilience, and SGX for its volatility beneficiary status — would likely outperform. Energy-linked names such as Seatrium and Sembcorp could continue to grind higher, while the broader market may face renewed selling pressure.

Singapore's position as a financial hub, with its strong currency, disciplined fiscal policy and well-regulated banking system, continues to make it an attractive market for investors seeking shelter from global turbulence. The Excel data for the week of 9 to 13 March 2026 confirms this thesis: even in the face of a major geopolitical shock and the largest oil supply disruption in history, the STI's constituents largely held their ground, and several posted impressive gains.

Investors would do well to maintain a balanced portfolio anchored by the core holdings identified above, while selectively adding satellite positions in names with clear catalysts and attractive valuations. The war has introduced a new layer of uncertainty to global markets, but for disciplined investors, uncertainty often breeds opportunity.

If you want to do your own analysis, you can get the data I used for the price of a cup of kopi!  Here:

👉 Time-Saver! 2025 Year End Top 30, 2026 January Top 60

👉 Time-Saver! Precompiled SGX STI Companies Stocks Statistics

Shields Up, Yields Steady: Navigating the STI Through the Iran War Week

How Singapore's blue chips weathered the first full trading week of the US-Iran conflict, and what an investor might consider for a core-satellite portfolio going forward.

9 March 2026 · Based on Excel data for the trading week of 2–6 March 2026

A Week of Reckoning

The week of 2 to 6 March 2026 delivered one of the sharpest tests of investor nerve that the Singapore market has seen in years. On 28 February, US and Israeli forces launched coordinated strikes on Iran, killing the country's Supreme Leader and senior military commanders. Tehran responded with retaliatory missile attacks on Gulf states hosting US military installations, and the Strait of Hormuz, through which roughly 20 per cent of global oil supply flows, came to an effective standstill as marine insurers withdrew war risk cover for vessels in the region. Brent crude surged by as much as 13 per cent to above US$82 a barrel, while jet fuel prices in Singapore hit record levels. The Straits Times Index, which had flirted with the historic 5,000 mark just days earlier, fell 104 points or 2.1 per cent on the first trading day of the week before staging a partial recovery over the following sessions.

The Excel data covering 2 to 6 March captures this turbulence in granular detail across all 30 STI constituents and the SPDR Straits Times Index ETF. What the numbers show is not a market in freefall, but rather a market making difficult and deliberate choices about which sectors deserve a premium, which deserve patience, and which now carry risks that simply were not there a fortnight ago.

The Headline Numbers

The SPDR STI ETF declined from $4.892 on Monday to $4.852 by Friday, a modest 0.8 per cent pullback that masks considerable intra-week volatility. Trading volumes spiked across the board, with many counters recording volumes two to four times their three-month daily averages. DBS Group saw its volume reach 3.2 times the average, while Singapore Airlines recorded 4.4 times and SATS 4.4 times, reflecting the heavy re-pricing activity in sectors directly exposed to the conflict.

At the sector level, the Excel data reveals a clear bifurcation. Communication services led all sectors with a 1.8 per cent gain for the week, driven entirely by Singtel. Consumer defensive names eked out a 1.5 per cent average gain, buoyed by a strong 6.9 per cent move in DFI Retail Group. At the other end of the spectrum, real estate names fell an average of 1.9 per cent, utilities declined 3.2 per cent (Sembcorp Industries), and industrials dropped 1.3 per cent on aggregate, though this masked enormous dispersion within the sector.

Defence and Aerospace: ST Engineering Stands Apart

The most striking single-stock story of the week belongs to Singapore Technologies Engineering, which rose 6.8 per cent from $10.25 to $10.95 even as the broader market retreated. The Excel data shows the stock closing within 2 per cent of its 52-week high, with analyst consensus placing it firmly in "buy" territory. This move reflects a confluence of structural and cyclical factors that position ST Engineering as a standout beneficiary of the current geopolitical environment.

ST Engineering entered the week carrying significant momentum. It had won $18.7 billion in new contracts in FY2025, of which $9.1 billion came from its defence and public security segment, including a contract for the new Titan 8x8 infantry fighting vehicle for the Singapore Army. On 3 March, the company announced a five-year maintenance contract worth EUR315 million from the Qatari army. More importantly, the company's management has stated that global defence spending is undergoing a "structural change" that is unlikely to wane even if current conflicts subside, pointing to NATO members' pledge to commit 5 per cent of GDP to defence by 2035.

Singapore's own defence budget supports this narrative. The government projected a S$24.9 billion defence expenditure for 2026, a 6.4 per cent increase, with the development allocation rising approximately 19 per cent year-on-year. Defence Minister Chan Chun Sing told Parliament that Singapore needs a strong and capable defence "more than ever" amid a worsening geopolitical climate. For ST Engineering, which operates across aerospace, defence, and smart city solutions, this combination of rising domestic and international order flow provides visibility that few other STI components can match.

• • •

The Banks: Steady Hands in Choppy Waters

Singapore's three banks, which together account for roughly half of the STI's index weight, held up reasonably well during the week, though all three ended lower. DBS Group declined 1.1 per cent from $55.63 to $55.00, OCBC eased 0.5 per cent from $20.93 to $20.82, and UOB dipped 0.6 per cent from $36.30 to $36.07. In the context of a week that saw crude oil spike by double digits and Middle Eastern airports shut down, this resilience says something important about how the market views these institutions.

The Excel data places DBS on a forward price-to-earnings ratio of 13.3 times, OCBC on 11.7 times, and UOB on just 9.9 times. All three trade above their 200-day moving averages and well above their 52-week lows. Dividend yields range from 4.0 per cent for OCBC to 5.6 per cent forward for DBS, figures that compare very favourably against Singapore government bond yields and fixed deposit rates. DBS Group Research has guided for FY2026 dividend yields of 6.1 per cent for DBS, 5.4 per cent for OCBC, and 5.4 per cent for UOB, underpinned by CET1 ratios well above regulatory requirements and growing fee income from wealth management.

The primary risk for the banks from the Iran conflict sits not in their direct exposure but in the second-order effects. Should oil prices remain elevated and feed into sustained inflation, the rate-cutting cycle that markets had been anticipating could stall or even reverse. Nomura has already flagged Singapore as one of the Asian economies most likely to tighten monetary policy in an oil shock scenario. Higher-for-longer rates would support net interest margins, which is positive for bank profitability, but could also dampen loan growth and weigh on asset quality, particularly in real estate-linked portfolios.

Airlines: Singapore Airlines Under Pressure

Singapore Airlines recorded the second-largest decline among STI stocks during the week, falling 2.8 per cent from $6.84 to $6.65. This is hardly surprising given the scale of aviation disruption unleashed by the conflict. The airline cancelled flights to and from Dubai through at least 7 March, while Middle Eastern airspace closures forced rerouting of Asia-to-Europe flights, adding 60 to 90 minutes of flying time per sector and increasing fuel burn on every affected service. Jet fuel prices hit an all-time high in Singapore during the week.

The Excel data shows SIA trading on a forward PE of 16.1 times with a trailing dividend yield of 5.3 per cent, which on the surface appears attractive. However, the analyst consensus mean of 3.3 (on a scale where 1 is a strong buy and 5 is a strong sell) makes it the least-favoured STI stock among sell-side analysts. OCBC Group Research noted that higher oil and insurance prices will pressure margins, and that prolonged airspace closures could lead to sustained cost increases. With SIA's fuel hedging ratios typically running at 40 to 50 per cent for 12 months forward, the airline has meaningful exposure to any sustained move higher in crude. An investor would likely view SIA as a stock to revisit once the conflict picture clarifies, rather than one to accumulate during the uncertainty.

REITs: The Yield Paradox

Real estate investment trusts were among the hardest-hit sectors during the week, with an average decline of 1.9 per cent across the STI's REIT constituents. CapitaLand Ascendas REIT fell 3.4 per cent, CapitaLand Integrated Commercial Trust dropped 3.3 per cent, and Mapletree Logistics Trust shed 3.1 per cent. The sell-off appears driven by two overlapping concerns: first, the prospect that the Iran conflict could stall or reverse anticipated interest rate cuts, thereby removing a key catalyst for the sector's recovery story; and second, a broader risk-off rotation away from yield-sensitive instruments toward safe-haven assets.

Yet the Excel data also reveals that many S-REITs now trade at dividend yields that are difficult to ignore. Mapletree Industrial Trust offers a 6.5 per cent trailing yield, Frasers Logistics and Commercial Trust yields 6.2 per cent, Mapletree Logistics Trust yields 6.0 per cent, and Mapletree Pan Asia Commercial Trust yields 5.7 per cent. Several trade below their book values, suggesting that the market is pricing in a degree of pessimism that may prove excessive if the conflict remains contained. DBS Group Research has noted that S-REITs are entering a multi-year earnings upgrade cycle for 2026 and 2027, supported by refinancing tailwinds as SORA has fallen to around 1 per cent. The complication is that this thesis assumes rates continue to fall, an assumption that the Iran conflict has now called into question.

Singtel: The Quiet Climber

Singtel gained 1.8 per cent during the week to close at $5.00, making it the third-best performer among STI stocks. The move attracted less attention than ST Engineering's rally, but it reflects an equally compelling structural story. Singtel has spent the past year reinventing itself as a digital infrastructure play, with its Nxera data centre arm building a 58MW facility in Tuas that is due to come online in 2026 and is already more than half pre-sold. The company partnered with KKR in a landmark deal announced on 4 February 2026 to acquire full ownership of ST Telemedia Global Data Centres for S$6.6 billion, one of the largest digital infrastructure transactions in Southeast Asian history.

On 3 March, Singtel announced a strategic collaboration with Ericsson to accelerate the deployment of 5G Advanced, positioning Singapore's network as an AI-powered platform for enterprise transformation. The Excel data shows Singtel trading on a forward PE of 24.4 times, which reflects the market's willingness to pay up for the data centre and AI growth narrative rather than treating the company as a traditional telco. Analyst consensus firmly favours the stock, with a mean recommendation of 1.6 and target prices clustered around S$5.10 to S$5.75. In a market rattled by geopolitical shocks, Singtel's domestic focus, secular growth drivers, and defensive revenue streams make it a natural port in the storm.

• • •

The Effects of War on STI Stocks

The Iran conflict's effects on the STI can be understood through three transmission channels. The first and most immediate is energy costs. Singapore imports virtually all of its energy, and any sustained increase in crude oil and LNG prices feeds directly into business operating costs and consumer inflation. The Excel data shows Sembcorp Industries, Singapore's largest listed utility, falling 3.2 per cent during the week despite being an energy producer itself, suggesting that the market views higher input costs as a net negative even for companies with some upstream exposure. Singapore Airlines, with its heavy fuel dependency, is the most directly affected counter.

The second channel is trade disruption. The Strait of Hormuz's effective closure, even if temporary, disrupts shipping lanes and raises freight costs. SATS, the ground and cargo handling company, fell 1.1 per cent during the week, though OCBC Group Research sees it as a potential beneficiary of redirected trade flows due to its diversified network. Yangzijiang Shipbuilding, which one might expect to benefit from higher shipping demand, instead fell 5.4 per cent, the worst performer in the index, as investors worried about broader supply chain disruption and the company's high beta profile.

The third channel is the defence spending tailwind. As discussed earlier, ST Engineering is the clearest beneficiary, but the broader defence procurement cycle also supports Seatrium through naval contracts and, indirectly, Singapore Exchange through increased derivatives trading activity as institutional investors hedge risk. SGX's volume spike of 2.5 times its three-month average during the week underscores this dynamic. The longer the conflict persists, the more structurally embedded these defence and risk-management tailwinds become.

Stocks That May Rise in the Coming Weeks

Any assessment of near-term price direction carries inherent uncertainty, particularly in a market grappling with an active military conflict. That said, the Excel data combined with the prevailing macro backdrop points to several names with favourable risk-reward profiles.

ST Engineering remains the most compelling momentum story. Its order book visibility, structural tailwinds from global rearmament, and domestic defence budget support give it a growth trajectory that is largely independent of the broader economic cycle. The stock's proximity to its 52-week high, ordinarily a reason for caution, is in this case a reflection of genuine earnings momentum rather than speculative excess.

Singtel's digital infrastructure pivot positions it to benefit from secular demand for AI compute capacity and data centre services, a trend that is unaffected by Middle Eastern geopolitics. The stock's re-rating from a traditional telco to a digital infrastructure name remains in its early stages, with substantial earnings growth expected as Nxera's new capacity comes online.

Among the banks, UOB offers the most attractive valuation at 9.9 times forward earnings with a price-to-book of just 1.2 times, the lowest among the three local lenders. Its ASEAN-focused growth strategy and strong capital position provide downside protection, while a forward dividend yield approaching 4 per cent offers income while an investor waits for the geopolitical fog to clear.

For yield-oriented investors willing to accept near-term volatility, CapitaLand Integrated Commercial Trust and Mapletree Pan Asia Commercial Trust offer forward dividend yields of around 5 per cent and 5.7 per cent respectively, trading below book value with strong institutional backing and analyst buy ratings. The recovery thesis for S-REITs has been complicated by the Iran conflict's potential impact on the rate-cutting cycle, but it has not been invalidated.

Building a Core-Satellite Portfolio

An investor seeking to construct a portfolio from the STI constituents in the current environment might consider a core-satellite approach that balances income stability against thematic upside, while managing exposure to the elevated geopolitical risk.

The core holdings, which should form the bulk of the portfolio, would prioritise steady dividend income, strong balance sheets, and proven resilience across market cycles. DBS Group, as the market leader with the highest ROE at 15.9 per cent and a forward dividend yield of 5.6 per cent, anchors this group. UOB, with its lower valuation and disciplined ASEAN growth strategy, provides a complementary banking exposure. CapitaLand Integrated Commercial Trust, with its diversified portfolio of retail and commercial assets, a 4.9 per cent trailing yield, and a price-to-book below 1.1 times, offers dependable real estate income. Singapore Exchange, while trading on a higher PE multiple of 25 times, provides unique exposure to rising trading activity driven by market volatility and benefits from its near-monopoly position.

The satellite holdings, which should represent a smaller allocation, would target stocks with higher growth potential and more concentrated thematic exposures. ST Engineering sits at the top of this list, offering a direct play on the global defence spending cycle with the added benefit of its commercial aerospace division, which profits from the same MRO demand that airspace disruptions accelerate. Singtel provides exposure to the AI and data centre megatrend through its Nxera arm, combined with a defensive telco base. For investors with a higher risk tolerance, Mapletree Pan Asia Commercial Trust offers a compelling value and yield combination at a price-to-book of just 0.8 times with a 5.7 per cent dividend yield, while Keppel DC REIT provides exposure to the data centre theme within a REIT structure, carrying an analyst consensus of 1.5 (strong buy).

Looking Ahead

The coming weeks will be defined by two variables that no amount of fundamental analysis can predict with certainty: the trajectory of the Iran conflict and the Federal Reserve's response to the oil-driven inflation impulse at its mid-March FOMC meeting. Oxford Economics has assessed that the conflict is unlikely to last beyond two months, while analysts at Citibank have projected a near-term Brent trading range of US$80 to US$90 per barrel with tail risks up to US$120 under a prolonged scenario. OCBC Group Research maintains an "Overweight" position on Singapore equities, viewing Singapore as a potential safe haven amid global geopolitical tensions.

The FTSE Russell quarterly review, announced on 6 March 2026, confirmed that the STI's 30 constituents will remain unchanged, with revisions only to the reserve list. This provides index stability at a time when investors need it. Singapore's GDP grew 4.8 per cent in 2025 and the MAS expects growth to remain resilient this year, while the unemployment rate held steady at 2 per cent in the fourth quarter. These domestic fundamentals, combined with the SGD's traditional safe-haven characteristics and the ongoing Equity Market Development Programme fund deployment, provide a floor beneath valuations.

For investors with a medium-term horizon, the current pullback in quality names offers an opportunity to build positions at more attractive entry points than were available even a fortnight ago, when the STI was knocking on the door of 5,000. The key is to be selective, to favour companies with structural growth drivers or deeply entrenched competitive positions, and to ensure that the portfolio's income stream provides adequate compensation while the geopolitical situation unfolds.

Disclaimer: This commentary is provided for informational purposes only and does not constitute financial advice. The author is not a licensed financial adviser. All investment decisions should be made in consultation with a qualified financial professional. Past performance is not indicative of future results. The analysis is based on publicly available data and may not reflect the most current market conditions.

References

[1] Business Today Malaysia; "SGX Opens Higher As Bargain Hunting Follows Global Volatility"; 03 Mar 2026

[2] CNBC; "Middle East conflict poses fresh test to central banks as oil shock fuels inflation"; 04 Mar 2026

[3] NPR; "Oil prices surge, but no panic yet, as Iran war continues"; 02 Mar 2026

[4] CNN; "Surging energy prices and threats to shipping. How the Middle East war could hurt the global economy"; 06 Mar 2026

[5] CNN; "Oil surges and stock futures sink as war in Iran threatens crude supply"; 01 Mar 2026

[6] Fortune; "Asian aviation stocks plunge as Iran conflict forces airlines to cancel flights over Middle Eastern airspace"; 01 Mar 2026

[7] ts2.tech; "STI flirts with 5,000: Yangzijiang and AEM set the pace on SGX in the week ahead"; 01 Mar 2026

[8] OCBC Group Research via Minichart; "Singapore Market Outlook March 2026: Top Stock Picks, STI Movers and Analyst Insights"; 03 Mar 2026

[9] OCBC Group Research via Minichart; "Middle East Tensions: Impact on Singapore Equities, Oil, Defence and Aerospace Stocks"; 04 Mar 2026

[10] Bloomberg; "Singapore Projects Nearly $20 Billion Defense Spend This Year"; 27 Feb 2026

[11] The Edge Singapore; "ST Engineering expects to repeat doubling of international defence contract wins this FY2026"; 27 Feb 2026

[12] Defense News; "Singapore inks deal for ST Engineering's Titan 8x8 vehicle"; 04 Feb 2026

[13] Janes; "Singapore announces defence budget increase"; 13 Feb 2026

[14] The Edge Singapore; "ST Engineering debuts new solutions across aviation, defence and smart city at Singapore Airshow 2026"; 02 Feb 2026

[15] Business Today; "SGX Opens Higher Amid Middle East Tensions And Global Oil Surge"; 05 Mar 2026

[16] TipRanks; "FTSE Russell Leaves Straits Times Index Constituents Unchanged, Revamps Reserve List"; 05 Mar 2026

[17] DBS Group Research via Minichart; "Asia REITs Outlook 2026: Opportunities in Singapore, Hong Kong, China and Thailand Amid Lower Rates and Market Volatility"; 05 Mar 2026

[18] Reuters via CNBC Africa; "Rising fuel prices lash airline sector as Iran conflict widens"; 05 Mar 2026

[19] CNN; "The hole in the sky: How Middle East airspace closures are reshaping global aviation"; 02 Mar 2026

[20] Channel NewsAsia; "Commentary: How the war in Iran could impact global economy, including Singapore"; 06 Mar 2026

[21] Ericsson; "Singtel and Ericsson accelerate 5G Advanced"; 03 Mar 2026

[22] Dr Wealth; "DBS, OCBC and UOB 4Q25 Results: Good or Bad? Have Banking Stocks Peaked?"; 26 Feb 2026

[23] Oxford Economics; "The 2026 Iran War, An Initial Take and Implications"; 02 Mar 2026

If you want to do your own analysis, you can get the data I used for the price of a cup of kopi!  Here:

👉 Time-Saver! 2025 Year End Top 30, 2026 January Top 60

👉 Time-Saver! Precompiled SGX STI Companies Stocks Statistics