Sky is the limit for STI

Since my previous post on the STI, it has broken through its resistance level:

https://financeopti.blogspot.com/2025/07/when-will-sti-meet-resistance.html

In fact, turns out the 'resistance' at 4,165 was not much of a resistance at all, lol!

That is why I feel chart reading/technical analysis is not 100% accurate; it can only serve as a guide, but you cannot trust it 100% completely.

Here is the chart of STI currently:

The STI has created new highs almost every single day for the last 2 weeks.

From a technical analysis perspective, there is no other resistance in sight. 

So how much higher can it go?

Maybe we can get some idea from the 5 billion injection by MAS, announced in February 2025:

https://www.straitstimes.com/business/companies-markets/new-5-billion-scheme-by-mas-to-boost-spore-stocks-as-part-of-measures-to-revive-sgx

From the article, we learn the following:

The Monetary Authority of Singapore (MAS) will launch a $5 billion programme through which it will partner with selected fund managers to invest in Singapore stocks, it said on Feb 21.

The programme will invest in a range of funds managed by local as well as foreign fund managers based in Singapore.

Eligible fund strategies include those that invest in Singapore equities, or invest a substantial component in Singapore equities as part of a regional or thematic focus.

The strategies should be actively managed, commercially viable and work towards attracting capital from other commercial investors including institutional funds, family offices and other private entities, MAS added.

So, $5 billion will be pumped into the STI. 

Has this pumping started yet? Based on the news below as of today 21 July 2025, it seems no.

https://www.businesstimes.com.sg/singapore/mas-appoints-first-3-asset-managers-inject-initial-s1-1-billion-singapore-equities

Now, let's ask a hypothetical question:

Assuming we freeze the STI now at 4,207 and pump in 5 billion, how much higher can the STI go?

Let's do some back-of-the-envelope calculations.

First, we need to know how much the combined capitalization of the STI is currently.

According to Perplexity.AI, it is now S$661.4 billion.

So with an additional 5 billion pumped in, this represents a 0.7% increase. 

A 0.7% increase of today's STI of 4,207 will give us 4,236.

At the rate this is going, I think very likely STI will rise above 4,236 (note the 5 billion pumping has not even started!). Hence, we can even take 4,236 as the lower bound (barring any black swan events).

STI, onwards!!