Local stock market performed steadily in the third quarter but lagged behind its Asian peers | Lianhe Zaobao

The local stock market performed steadily in the third quarter of this year, with the index's increase comparable to that of the S&P 500, but lagging behind most major Asian indices. Nevertheless, analysts believe that supported by safe-haven status and market revitalization initiatives such as the Equity Market Development Plan (EQDP), the local stock market will maintain growth in the long term. As of 3 PM on September 30, the Straits Times Index in Singapore rose approximately 7.6% over the past three months, slightly above the S&P 500's 7.5%, but slightly underperformed in the Asian market. The CSI 300 index rose 17.7%, the Taiwan Weighted Index increased by 14.5%, the Nikkei 225 index rose 12.4%, and the Hang Seng Index increased by 10.6%. Compared to other ASEAN markets, the Straits Times Index lagged behind Thailand and Indonesia but performed better than Malaysia. In this regard, Gao Yuanhui, a research analyst from FSMOne Singapore's research and portfolio management department, pointed out in an interview with Lianhe Zaobao that Asian stock indices generally rose, mainly supported by policy easing and strong performance in the technology sector. In contrast, the Straits Times Index's increase was moderate, possibly due to the high weight of bank stocks, while low interest rates compressed bank profits, dragging down overall performance. In the third quarter of this year, small and mid-cap stocks generally outperformed large-cap stocks. Data provided by Gao Yuanhui showed that the overall average return of the Singapore stock market in the third quarter reached 22.2%, far exceeding the return rate of the Straits Times Index. Among stocks with a market capitalization exceeding SGD 1 billion, the best performers in the third quarter were Bona Industrial (+119.7%), Yangtze River Financial Holdings (+58.1%), and Hong Leong Asia (+54.3%). In comparison, the poorly performing stocks did not decline significantly, with the largest drop being 10.8% for Shengke Industrial, while other declining stocks included Shengjie Enterprises and Singapore Airlines. By sector, the energy sector led the way with a surge of 43.1%, followed by the materials sector (+33.6%), technology sector (+28.1%), industrial sector (+26.8%), and healthcare sector (+25.5%). Lin Ziping, chief investment strategist at Moomoo Singapore, stated in an interview that if only looking at the components of the Straits Times Index, the industrial sector performed the best in the third quarter. Major stocks in the sector, such as Yangtze River Shipbuilding, Jardine Matheson, and Haitong, achieved strong increases of 47.81%, 28.97%, and 16.75%, respectively, in the third quarter. He said, "The entire sector benefited from strong demand in logistics, shipping, and high-tech engineering, while also benefiting from Singapore's position as a neutral global trade hub." He added that other factors, such as insider buying, also drove the sector's rise. According to Bloomberg data, insiders at Haitong increased their holdings by 67% over the past six months. Supported by MAS revitalization measures, the market expects the Straits Times Index to continue rising Analysts are generally optimistic about the future trend of the local stock market. JP Morgan raised its 12-month bull market target for the Straits Times Index from the previous 5,000 points to 6,000 points last week, citing government reforms that will continue to improve the liquidity and visibility of the Singapore stock market. UOB Kay Hian pointed out in a report that the Monetary Authority of Singapore's S$5 billion securities market development plan launched this year has allocated S$1.1 billion to the first batch of selected asset management companies, with S$3.9 billion yet to be distributed. The report believes that the market will be supported by capital flows from the fourth quarter of this year to the first quarter of next year, and expects the Straits Times Index to reach 4,602 points by the end of this year. Lin Ziping believes that although the gains of the Straits Times Index and the S&P 500 are similar, when considering the depreciation of the US dollar, the annual return of the Straits Times Index may be significantly higher. He is optimistic about the real estate investment trust (REIT) sector. "With the Federal Reserve starting a rate-cutting cycle and the Monetary Authority of Singapore having relaxed monetary policy twice in the past, the REIT sector will continue to recover." DBS Group Research noted that the Singapore stock market is a safe haven in a macroeconomic uncertain environment, expecting the Straits Times Index to be at 4,430 points by the end of the year. Meanwhile, small and mid-cap stocks are expected to continue outperforming the market driven by the securities market development plan and the Singapore capital markets grant scheme (GEMS). However, Gao Yuanhui believes that despite the optimistic long-term outlook, in the short term, the stock market's performance will still be affected by macroeconomic headwinds, and global trade uncertainties will pose risks to exports and GDP