(Aug 12): JPMorgan Chase & Co raised its target for Singapore stocks as robust economic growth and a narrowing valuation gap with developed-market peers bolster their outlook.

The Straits Times Index (STI) may climb up to 7,000 over the next 12 months in a bull case scenario, analysts including Khoi Vu wrote in a note. The target implies a 22% upside from Tuesday’s close. 

“A goldilocks economic backdrop should continue to underpin earnings per share growth and empower fiscal room,” JPMorgan analysts said. “Strong yields, stable currency, and the Equity Market Development Programme should enhance investor flows.”

Singapore stocks have been on a tear this year, buoyed by demand for a haven from geopolitical tensions and artificial intelligence (AI)-driven volatility. The benchmark has gained more than 23% in 2026, outperforming the gauge in rival financial hub Hong Kong. 

The city state earlier this week upgraded its 2026 economic growth forecast anew as the AI boom lifts trade and manufacturing, offsetting the drag from continued fighting in the Middle East. A stronger Singapore dollar also supported local equities. 

JPMorgan had raised its base case for the Straits Times Index to 6,000 in January. The gauge has risen 16% since. The measure fell as much as 0.7% on Wednesday.

“While valuations have broken out of the averages, we believe this level will be sustained as the STI reprices closer to other developed markets driven by high yield and a stable currency,” JPMorgan analysts said. Its top stock picks include DBS Group Holdings Ltd, Singapore Exchange Ltd, Keppel Ltd and UOL Group Ltd.

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