Market watchers are less optimistic about Singapore stocks this year, citing uncertainty surrounding global interest rate trends and potential trade restrictions. The Straits Times Index (STI) surged 16.9% in 2024, its first double-digit expansion in three years and best performance since 2017, driven by strong performance from the three local banks. Experts anticipate continued support for bank earnings in 2025 as the Federal Reserve's rate-cutting cycle slows.
However, economists warn that 2025 may be less favorable than 2024, with demand from major trading partners China, the US, and the European Union directly influencing Singapore's export-dependent economy. High US interest rates could impact economic growth and the equities market, potentially affecting real estate investment trusts (REITs) which are expected to face pressure in the first half of 2025 but may recover later. REIT performance will be monitored based on their ability to increase net property income, occupancy rates, generate positive rental reversions, and secure new tenants