To The Moon

The IMF's 2026 Article IV Consultation projects Singapore's economy to expand 3.5% in 2026 and 2.7% in 2027, following growth of 5.0% in 2025. Recent growth was supported by technology-related exports and investment, particularly continued demand associated with the global AI and semiconductor cycle.

While growth is expected to moderate, the IMF notes in the full report released last night that technology adoption, productivity improvements and continued investment in productive capacity will remain important drivers of Singapore's medium-term growth trajectory. The report also highlights ongoing initiatives to support innovation, digitalisation and workforce development, including investment under the S$37 billion Research, Innovation and Enterprise (RIE2030) plan. Continued investment in infrastructure, manufacturing and business capabilities was also identified as supporting future growth.

Continued demand linked to semiconductors and AI-related investment is contributing to manufacturing activity, business investment and broader capacity expansion across the economy. Gross capital formation recovered to 22.5% of GDP in 2025 and is projected to increase to 23.4% of GDP in 2026 and 23.7% of GDP in 2027, supported by infrastructure development, manufacturing investment and technology-related capital expenditure. 

Gross domestic investment is also projected to rise through 2027 even as GDP growth moderates, suggesting the current investment cycle extends beyond the technology export recovery and remains supported by infrastructure, manufacturing and business investment.
 

Trade, Investment and Global Positioning

The IMF notes that Singapore continues to benefit from its role as a regional business, financial and trading hub. Continued investment in connectivity, innovation and workforce capabilities is supporting business activity, investment and multinational presence in Singapore.

Trade fragmentation was identified as a key downside risk, reflecting Singapore's exposure to global trade and investment flows. However, the report notes that Singapore's diversified economy and strategic position within regional and global supply chains provide support as trade and technology flows evolve.

Singapore maintained a current account surplus of 16.7% of GDP in 2025, while gross national saving remained around 39% of GDP. Gross official reserves reached US$409 billion at the end of 2025 and increased to US$427 billion by April 2026, providing substantial external buffers while supporting continued investment in productive capacity.
 

Financial Strength and Economic Resilience

The IMF notes that Singapore's banking sector remains well capitalised, with a capital adequacy ratio of 18.5% in 2Q25. Liquidity Coverage Ratios remained above regulatory requirements while the non-performing loan ratio stood at 1.1%.

The IMF noted that Singapore's three Domestic Systemically Important Banks ( $DBS(D05.SI)$ $OCBC Bank(O39.SI)$ $UOB(U11.SI)$), which collectively account for around 54% of Singapore's banking system assets, maintained robust capital positions under MAS' 2025 stress-test scenarios, including a global recession, trade and supply chain disruptions, tighter financial conditions and a prolonged domestic downturn. It notes that strong banking sector fundamentals, substantial fiscal and foreign reserve buffers, and Singapore's large external surplus continue to support economic stability and investment activity.

The trio of banks also comprise approximately 54% of the Straits Times Index, highlighting the importance of banking sector strength to overall market performance.
 

External Risks

The IMF noted that risks to growth remain tilted to the downside. Trade fragmentation, geopolitical tensions and further energy-price shocks could weigh on external demand, investment activity and business costs. The report also highlighted the possibility of a sharper-than-expected slowdown in global technology investment and demand following the current AI-related upcycle.
 

IMF Themes and Singapore Equities

The IMF's assessment of Singapore's economy reinforces several themes that are already evident across the Singapore equity market. Continued investment in productive capacity, technology adoption, infrastructure development, trade connectivity and financial system strength were recurring themes throughout the report.

These themes align closely with a handful of structural drivers that continue to shape opportunities across Singapore-listed companies.

The IMF's projections suggest several of these themes extend beyond the current technology cycle. As noted above, gross domestic investment is projected to rise through 2027 even as GDP growth moderates, while Singapore's strong external position, skilled workforce, substantial reserves and resilient financial system continue to support business activity and value formation.

These themes are reflected across Singapore's 20 most actively traded stocks in 2026. Banking and capital-market strength are represented by DBS Group Holdings, Oversea-Chinese Banking Corporation, United Overseas Bank and $SGX(S68.SI)$ , reflecting the resilience of Singapore's financial system and its role as a regional capital markets hub. Infrastructure, connectivity and productive-capacity investment are reflected in $Singtel(Z74.SI)$ $ST Engineering(S63.SI)$ $Keppel(BN4.SI)$ $Keppel DC Reit(AJBU.SI)$, which provide exposure to engineering, telecommunications, utilities, logistics and digital infrastructure.

Trade connectivity and regional supply chains are represented by $SIA(C6L.SI)$ $YZJ Shipbldg SGD(BS6.SI)$ $CapLand Ascendas REIT(A17U.SI)$ $Wilmar Intl(F34.SI)$, reflecting exposure to transportation, logistics, industrial facilities and cross-border trade flows. $CapLand IntCom T(C38U.SI)$ $CapitaLandInvest(9CI.SI)$ $HongkongLand USD(H78.SI)$ provide exposure to commercial activity and Singapore's role as a regional business hub, while $AEM SGD(AWX.SI)$ $UMS(558.SI)$ provide exposure to the AI-driven semiconductor and advanced manufacturing ecosystem. 

The 20 most traded stocks in the 2026 year to 20 July are tabled below.