STI’s new high: A narrow group of companies unlocking value, lifting profitability has driven the run

The Straits Times Index (STI) reached a milestone of sorts early last week. When the market opened on Monday (Feb 10), the benchmark index hit a new all-time high of 3,921.30.

This surpassed the preceding record high of 3,906.16 set in October 2007, noted the Singapore Exchange (SGX).

One factor that drove the STI to its new high was a surge in shares of DBS, OCBC and UOB – which account for more than half the index. In particular, DBS crossed the S$46 threshold after another strong earnings report.

For me, this did not feel like an event worth celebrating. While the STI is essentially unchanged since just before the global financial crisis, the S&P 500 index has more than quadrupled. Is it any wonder that delistings have outpaced new listings on the local bourse for years?

In any case, the STI did not mark its new high on Monday with much conviction. By the end of the day, it slipped back below the 3,900 threshold. It closed on Friday at 3,877.5.