SINGAPORE, Jan 26, 2026, 09:53 (SGT)
- Singapore’s Straits Times Index ended last week at a record 4,891.45, boosted by fresh highs from UOB and OCBC
- SGX is seeking feedback on reducing standard board lot sizes to bring down the minimum cash required for purchasing higher-priced stocks
- Investors are closely eyeing whether the rally will extend past banks ahead of MAS’ policy update on Jan 29
Singapore’s Straits Times Index (STI) closed last week at a record high, boosted by strong gains in major banks. Investors found relief after U.S. President Donald Trump ruled out using force to acquire Greenland and eased off tariff threats against European nations. UOB climbed nearly 8% over the week to a record S$39.50, while OCBC rose 4.52% to hit S$21.29. 1
This shift is significant now that the STI reacts more sharply to a handful of heavyweight stocks, even as regulators and brokers push to channel more retail funds into cash equities. While a record close grabs attention, it also raises the bar for wider market involvement beyond the familiar bank trio.
That’s where the plumbing plays a role. In Singapore, a “board lot” refers to the standard trading unit for a stock — essentially, the minimum size investors use to buy and sell on the main market.
SGX is asking for input on a plan to slash the standard board lot size from 100 units to 10 units for securities priced between S$10 and S$100, and down to a single unit for those above S$100. The exchange wants feedback by Feb 13, aiming to roll out the changes by mid-2026. Ng Yao Loong, head of equities at SGX Group, said this would cut the minimum investment from several thousand dollars to just a few hundred. 2
Some market watchers appreciate the move but caution it won’t solve everything. Shekhar Jaiswal, RHB Singapore’s head of equity research, warned that increasing small-sized tickets might “fragment liquidity” and push “wider effective spreads” if market depth remains thin. 3
The bank rally has been driven by upgrades and a favorable rate outlook. Macquarie’s Jayden Vantarakis upgraded UOB to “outperform,” highlighting Singapore banks as a “safe-haven” for wealth flows. Meanwhile, Morningstar’s Kathy Chan noted UOB is “catching up” after trailing DBS. Chan also pointed out that markets now expect the U.S. Federal Reserve to hold rates steady in the near term—a scenario that tends to boost banks’ lending margins, even though rate cuts expected in 2026 could put pressure on them. 4
Price targets are turning bolder as the STI edges upward. Timothy Wong, DBS Research group head of strategy, projects the index could hit nearly 10,000 by 2040. Others have tossed around shorter-term marks just above 5,000. But OCBC’s head of equity research, Carmen Lee, warns that 5,000 isn’t a true breadth test—the index can be driven by “four or five stocks,” since the three local banks account for just over half the STI’s weight. 5
Investors are eyeing a key macro event this week. The MAS policy review is scheduled for Jan 29, and a Reuters poll shows most economists predict no change. The central bank is also expected to update its inflation forecasts in that statement. Tay Qi Hang, an analyst at Economist Intelligence Unit Asia, noted the tech cycle has “retained momentum.” Meanwhile, Standard Chartered’s chief economist Edward Lee said there’s “no urgency” to act this month. 6
The upside scenario isn’t straightforward. The STI’s record close leans heavily on banks, so any quicker-than-anticipated rate cuts or a spike in credit costs could hit the index hard where it’s most concentrated. As for market structure, smaller board lots might reduce entry barriers, but without more listings and liquidity, they risk generating a flurry of small trades without boosting real depth.
