2025 Likely to See Bull Market Continue, But Trade With Caution

The year 2024 has been a good one for financial markets in general, and equities in particular.

- Ven Sreenivasan

The Straits Times Index (STI) made its most significant push towards its all-time high in 17 years, getting within 2 per cent of that 3,906.16-point level by early December.

Despite US interest rate cuts beginning in September—six months later than the majority consensus at the start of 2024—investors witnessed a soft landing in the US economy.

Additionally, increased policy support by China throughout the year boosted its stock market.

The overall bid tone in both the US and China stock markets coincided with the STI generating a 24 per cent total return for the year up to mid-December, primarily driven by its 50 per cent weightage to its trio of banks, which averaged a 43 per cent return over the period.

It closed 17 per cent higher on Dec 31.

The STI began 2024 relatively sluggishly, although it opened the year at 3,240.83 with a relatively optimistic market outlook. However, with the key anticipated macroeconomic inflections delayed, the benchmark index surpassed this level only a few times in the first quarter.

Yet, the STI found short-term support at 3,200 in the last week of March and closed below this threshold only a handful of times for the rest of the year.

The highly coveted theme of a soft landing in the US economy led economists and analysts to gradually revise their 2024 Singapore gross domestic product projection from 2.4 per cent in mid-March to 3.6 per cent by late November.

But as it turned out, the economy outperformed expectations, growing 4 per cent in 2024.

The Singapore Exchange's total securities market turnover value rose 51 per cent year on year to $30.2 billion in November—a 12 per cent rise from October's $26.9 billion.