The SGX Has Hit New Highs This Year. Is This the Start of 2026’s Dividend Boom?

Core Insights - Singapore's stock market, particularly the Straits Times Index (STI), is experiencing significant growth, reaching new all-time highs after a prolonged period of slow trading [1][3] - Major blue-chip companies like DBS, Singtel, and Keppel are gaining strength, while several REITs, including Mapletree Logistics Trust and CapitaLand Ascendas REIT, are showing signs of stabilization after challenging years [1][3] Market Dynamics - The market is benefiting from several tailwinds, including peaking interest rates and easing financing costs for REITs, which could lead to a recovery in DPU growth [3] - Stronger blue-chip companies, such as DBS and OCBC, are well-capitalized and demonstrating resilient earnings, indicating a robust market foundation [3][4] Strategic Initiatives - The Monetary Authority of Singapore (MAS) has launched a S$5 billion Equity Market Development Program aimed at revitalizing the Singapore Exchange (SGX), attracting more listings, and enhancing liquidity [4] - This initiative represents a structural push rather than a temporary measure, signaling long-term growth potential for the market [4] Investment Outlook - Analysts suggest that 2026 could be a pivotal year for dividend investing, as improving market fundamentals and returning confidence create favorable conditions for dividend investors [5][8] - The current market environment presents a crucial opportunity for income investors to prepare for potential growth before 2026 [8] Stock Selection Criteria - Not all stocks will benefit equally from the market recovery; some may offer high yields without solid earnings backing, while others may appear cheap but carry long-term risks [6][7] - The strongest dividend opportunities are characterized by reliable free cash flow, prudent gearing, sensible payout ratios, a durable competitive moat, and clear visibility into earnings or DPU growth [11]