Singapore market shrugs off Maduro ouster as world awaits resolution of Venezuelan crisis

[SINGAPORE] Singapore equities were largely unscathed after the weekend’s US-backed regime change in Venezuela, as investors mostly shrugged off the geopolitical risk, analysts said.

Market watchers said that the muted market reaction in Singapore and the region underscored the city-state’s relative appeal as a safe haven, but they warned against expecting a rush of capital inflows into Singapore or the equity market.

“Because we don’t see much negative reaction in the US, I believe investors are brushing off the risk of the Venezuela action for the most part,” said Lorraine Tan, director of equity research on Asia at investment research firm Morningstar.

“Where Singapore benefits is in its stable and relatively strong currency, but I think the latest event is not necessarily shifting flows,” she told The Business Times.

Carmen Lee, head of equity research at OCBC Group Research on global markets, said it was “too early” to assess whether the Venezuela crisis would materially affect the performance of the Singapore Exchange (SGX) in 2026, and that developments would need to be monitored over the coming weeks.

She added that Singapore’s market structure shapes how it behaves during periods of geopolitical stress.

Historically, growth-heavy markets tend to experience sharper volatility in uncertain times, while more value-oriented markets are better positioned to cushion price swings.

Lee described Singapore stocks as being predominantly value-loaded, typically offering decent dividend yields.

On whether heightened geopolitical uncertainty could push more companies to consider Singapore as a listing venue, she said listing decisions depend on a broad set of factors, including pricing, timing and prevailing market conditions.

Still, with more than 30 initial public offerings in the pipeline, SGX could be in for a “busy” year if some of these deals materialise over the next six to 12 months, she added.

On the shipping front, analysts described the impact of the Venezuela developments on Singapore’s container trade as negligible.

Linerlytica analyst Tan Hua Joo said that as volumes of box trade in Venezuela are limited, the spillover effects on Singapore are similarly constrained.

Lars Jensen, chief executive officer of Vespucci Maritime, noted that, with no major direct deep-sea services calling at Venezuela, container shipping would be “negligibly affected”.

He added that the annual container throughput at Venezuela’s two largest ports was only about 1.3 million 20-foot-equivalent units (TEUs) at Venezuela’s two largest ports, compared with nearly a billion TEUs handled globally.

Positive market reaction

On Jan 3, US military forces launched a major operation against Venezuela’s government, resulting in the capture of President Nicolas Maduro and his wife.

The US operation, dubbed Operation Absolute Resolve, involved coordinated air and special-forces action in the Venezuelan capital, Caracas. The Trump administration then flew Maduro and his wife to the US, where they face federal criminal charges, including narcoterrorism and cocaine trafficking.

US officials have characterised the mission as part of a broader effort to enforce drug indictments and to facilitate a “safe transition” in Venezuela, including potential oversight of the country’s oil and governance structures.

Following the raid, Venezuelan Vice-President Delcy Rodriguez is interim president.

Investor reaction on the first trading day after the operation ranged from muted to positive in Singapore and the region.

Singapore’s benchmark Straits Times Index rose 0.5 per cent to close at 4,680.50 points on Monday, broadly in line with regional peers.

Japan’s Nikkei 225 gained 3 per cent, South Korea’s Kospi rose 3.4 per cent and the FTSE Bursa Malaysia KLCI added 0.6 per cent; Hong Kong’s Hang Seng Index was almost flat.

The international oil benchmark, Brent crude, slipped 0.1 per cent to US$60.70 a barrel, while West Texas Intermediate, the US benchmark, was flat at US$57.33 a barrel as at 7 pm on Monday.

Oil markets are not anticipating a rapid increase in crude supply from Venezuela, which accounts for about 1 per cent of daily global output, said Stephen Dover, chief market strategist at the Franklin Templeton Institute, and Larry Hatheway, the firm’s global investment strategist, in a note on Monday.

“Venezuela has the world’s largest reserves of crude oil – over 300 billion barrels – but the poor state of its ageing oil extraction and transportation infrastructure, coupled with the low quality of its heavy crude, suggest that even the arrival of political stability will not quickly increase its crude oil output or exports,” they added.

Safe-haven assets strengthened on Monday, with spot gold prices rising 2.4 per cent. The US dollar index, which measures the greenback against a basket of six currencies, was up 0.2 per cent as at 7 pm.

Additional reporting by Tay Peck Gek