DBS SP Research Hub

The 1Q26 earnings season for Singaporean equities has been characterized by positive earnings revisions and stable results from the banking sector, which are particularly evident in wealth-driven fee income performance. While the Straits Times Index has returned 11.5% YTD, current valuations are trading above historical averages due to a structural regime shift driven by government market reviews. Within this landscape, the banking sector remains a pillar of stability compared to Real Estate Investment Trusts, which show mixed momentum across different asset types. Notable performance in the financial sector is supported by robust wealth management fees, helping to offset broader macroeconomic challenges. These challenges include high bond yields and strong currency translation, which remain significant headwinds for the local market. However, the structural changes and government reviews suggest a positive fundamental shift for large-cap financial institutions like DBS. Research indicates that the banking industry's ability to maintain earnings quality amidst these shifts is central to sustaining current market valuation levels.