The Singapore Exchange has been witnessing something rather extraordinary this July. As the Straits Times Index (STI) surged to a 52-week high of 4,109.2 points, representing an impressive 8.5% year-to-date gain, two blue-chip stalwarts have emerged as the undisputed champions of this remarkable rally. Yahoo Finance
For high-earning professionals and sophisticated investors watching from the sidelines, the numbers tell a compelling story. Singapore Technologies Engineering (STE) has delivered a staggering 72.3% year-to-date gain, whilst Hongkong Land Holdings (HKL) has surged 49.2% in the first half of 2025 alone. These aren't speculative penny stocks riding a wave of retail euphoria—these are established blue-chip companies with decades of operational history and substantial market capitalisations.
Singapore Technologies Engineering's ascent to an all-time high of S$8.40 represents more than just market momentum—it's a testament to robust fundamentals underpinning investor confidence. The aerospace and defence conglomerate's 2024 full-year results provide compelling evidence of operational excellence that justifies much of the market's enthusiasm.
The numbers are particularly striking. STE reported revenue of S$11.3 billion in 2024, marking a substantial 12% increase from the previous year's S$10.1 billion. More impressively, net profit surged nearly 20% year-on-year to S$702.3 million, demonstrating the company's ability to convert revenue growth into bottom-line performance. Yahoo Finance
The company's profit margin expansion from 5.8% in 2023 to 6.2% in 2024 reflects operational efficiency gains that astute investors have clearly recognised. This isn't merely about top-line growth—it's about a company that's becoming more profitable with scale.
What's particularly noteworthy is STE's robust order book, which swelled to a multi-year high of S$29.8 billion following the addition of approximately S$4.4 billion in new contracts during the first quarter of 2025. This provides substantial revenue visibility and underscores the company's competitive positioning in its core markets.
Hongkong Land's remarkable 49.2% year-to-date performance reflects a fundamental strategic pivot that has captured institutional attention. The property giant's recent strategic review represents a decisive shift away from development activities towards a pure-play investment property model—a transformation that sophisticated investors have embraced with considerable enthusiasm.
The company's 2035 strategic vision is particularly ambitious. Management has committed to doubling dividends per share from the current US$0.22 to US$0.44 over the next decade, whilst simultaneously growing assets under management to US$100 billion. Hongkong Land Strategy
This isn't merely aspirational rhetoric. The strategic review involves unlocking value of up to US$10 billion over the next ten years through the systematic wind-down of the build-to-sell segment and the strategic recycling of selected investment properties. DBS Research
For dividend-focused investors, the progressive dividend policy represents a particularly compelling proposition. Despite a 44% year-on-year decline in underlying net profit to US$410 million in 2024 (largely due to provisions), the company increased its dividend by 5% to US$0.23 per share—a clear signal of management's confidence in the new strategic direction.
The rally in Singapore's blue-chip stocks isn't occurring in isolation—it's supported by substantial institutional flows that suggest sophisticated money is positioning for sustained outperformance. Recent data reveals institutional investors as net buyers of S$87.3 million during the week of 7 July, whilst retail investors were net sellers of S$325.5 million. Minichart Singapore
This divergence in behaviour between institutional and retail investors is particularly telling. Whilst retail investors appear to be taking profits, institutional investors are accumulating positions—suggesting that professional money managers view current valuations as attractive relative to fundamentals.
The STI's performance relative to regional peers further reinforces Singapore's appeal as a safe-haven destination. With the index posting a 6% gain in the first half of 2025, it has outperformed many regional markets whilst maintaining the stability that institutional investors value. Business Times
Paradoxically, the ongoing trade tensions that have created volatility in other markets appear to be benefiting Singapore's equity market. The city-state's strategic position as a trading hub means it often benefits from trade disruptions that force re-routing of global commerce.
Nomura's analysis suggests that Singapore's economy has successfully avoided a technical recession in the second quarter of 2025, with GDP growth tracking at 4.4% year-on-year—an acceleration from the 3.9% recorded in the first quarter. The research house maintains its 2025 GDP growth forecast of 2%, notably higher than the consensus of 1.7%. Business Times
This economic resilience, combined with Singapore's ranking as the world's top port for the 12th consecutive year, reinforces the structural advantages that make the city-state an attractive investment destination during periods of global uncertainty.
For high-net-worth investors evaluating opportunities in this rally, the key question is whether current valuations reflect sustainable fundamentals or speculative excess. The evidence suggests a nuanced picture.
STE's current trading multiples, whilst elevated from historical norms, appear justified by the company's improved operational metrics and substantial order book visibility. The company's progressive dividend policy, promising S$0.18 in dividends for 2025 (up from S$0.17 in 2024) with incremental payouts equivalent to one-third of net profit increases from 2026 onwards, provides additional support for current valuations.
Hongkong Land's transformation story is similarly compelling from a valuation perspective. The company's price-to-book ratio of 0.46 suggests the market hasn't fully recognised the value unlocking potential of the strategic review. Minichart Singapore
For high-earning professionals and business owners, the current blue-chip rally presents both opportunities and considerations. The quality of earnings growth demonstrated by companies like STE, combined with the strategic clarity exhibited by Hongkong Land, suggests that Singapore's blue-chip sector is experiencing a fundamentally-driven rerating rather than speculative excess.
However, the magnitude of year-to-date gains necessitates careful position sizing and risk management. Whilst the underlying fundamentals remain supportive, the concentration of gains in a relatively small number of stocks creates potential vulnerability to profit-taking or sentiment shifts.
The institutional preference for defensive sectors such as healthcare, aerospace & defence, and cybersecurity aligns well with STE's business model, suggesting that the current rally may have further room to run. Minichart Singapore
Looking forward, the sustainability of Singapore's blue-chip rally will depend on several key factors. The continued execution of strategic initiatives by companies like Hongkong Land, the maintenance of STE's order book growth, and the broader macroeconomic environment will all play crucial roles.
The upcoming earnings season will provide critical validation of whether the rally has been justified by operational performance. With major corporates including STE and HKL scheduled to report in the coming weeks, investors will have fresh data to assess the sustainability of current valuations.
For now, the combination of strong fundamentals, strategic clarity, and institutional support suggests that Singapore's blue-chip renaissance may have further to run. However, as with all market rallies, maintaining appropriate diversification and risk management remains essential for long-term investment success.
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