JPMorgan raises target for Singapore stocks on robust economic growth

JPMorgan Chase & Co has increased its target for Singapore stocks due to strong economic growth and reduced valuation gaps with developed-market peers, according to a recent note from the investment bank. The Straits Times Index (STI) could reach up to 7,000 within the next 12 months, suggesting a potential 22% upside from its August 11 closing price.

This optimistic outlook is attributed to a "Goldilocks" economic environment that continues to support earnings per share growth and increase fiscal flexibility for investors.

Analysts from JPMorgan believe that the city-state's robust performance is further bolstered by strong yields, a stable currency, and the ongoing Equity Market Development Programme, which offers grants to firms and individuals in the financial services sector to strengthen Singapore's status as a financial hub. The city-state's stock market has experienced significant gains in 2026, climbing more than 23% year-to-date, outpacing its competitors in the financial sector in Hong Kong.

Singapore's economic outlook was further strengthened this week with the release of an upgraded 2026 economic growth forecast, as the artificial intelligence boom drives growth in trade and manufacturing, offsetting the negative impact of ongoing conflicts in the Middle East. A stronger Singapore dollar also contributed to the positive performance of local equities.

In their recommendation, JPMorgan analysts maintain that while valuation levels have surpassed the average, this level is expected to be sustained as the STI repositions closer to other developed markets driven by high yields and a stable currency. The bank's top stock picks include DBS Group Holdings, Singapore Exchange, Keppel, and UOL Group.