Singapore’s bank sell-off: A reset in expectations, not fundamentals

After a strong run this year, the Straits Times Index (STI) fell more than 4.5 per cent over two sessions, with the big banks leading the decline. For investors who have enjoyed the rally, the question is whether this is a brief pause or a sign that the market’s assumptions need rethinking.

In this episode of Market Focus Weekly, a podcast from The Business TImes. Howie Lim speaks with Geoff Howie, market strategist at SGX, about what is driving the pullback and where the opportunities may lie. Elevated US bond yields, rising input costs and a changing rate outlook all feature in the discussion.

Why listen

• Why this looks like a reset, not a breakdown  Howie points to robust demand and upgraded growth forecasts. He explains why the sharpest falls hit the strongest prior performers.

• Who sold and who bought  Institutions were net sellers of all three local banks, about S$405 million in total over four sessions. Retail investors bought roughly S$560 million across the same three. Howie explains what the flows suggest about repositioning.

• What to watch in bank earnings  Net interest margins matter, but non-interest income now makes up 41 per cent of total income, up from about 31 per cent three years ago. Howie outlines the other signals he is tracking.

• S-Reits under yield pressure  With US 10-year yields above 5 per cent, income stocks face real competition. Howie lists the indicators that separate sustainable distributions from the rest.

• Is liquidity improving for smaller stocks?  Howie reviews MAS’ equity market development programme. The number of stocks trading at least S$1 million a day has risen from just under 80 to more than 100.

• How to avoid a value trap  Howie explains why timing and earnings revisions matter, and why the new 10-share board lot has been popular with retail investors.

The conversation offers a practical framework for deciding whether to buy the dip. Listen now.

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Written and hosted by: Howie Lim (howielim@sph.com.sg)

With Geoff Howie, market strategist, SGX

Edited by: Howie Lim & Claressa Monteiro

Produced by: Howie Lim & Chai Pei Chieh

A podcast by BT Podcasts, The Business Times, SPH Media

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