Institutional Investors Net Buy S$856M in Singapore Stocks in H2 2024

In the second half of 2024, institutional investors net bought S$856 million in Singapore stocks, reversing the S$1.175 billion net selling in the first half of the year. This significant turnaround in net institutional fund flow brought the overall net institutional fund flow for the local stock market to S$319 million in net selling for the year. For every Singapore-listed stock that experienced net institutional selling in 2024, another stock saw net institutional buying.

The Straits Times Index (STI) surged by 16.9% in 2024, with dividends boosting the total return to 23.5%. The regional outperformance was driven by strong results from major banks, a soft landing in the US economy, and the closing of Singapore's output gap, which saw Singapore generate 4.0% GDP growth for the first 11 months of the year.

Singapore Telecommunications ("Singtel") recorded the highest net institutional buying in the local stock market for the 2024 calendar year, with S$826 million in net buying. This was driven by several factors:

1. Strong performance of the Communications Sector: For a good six months of 2024, the Communications Sector was among the strongest globally and regionally, with global communication indices paralleling global technology indices.
2. Launch of Singtel's new growth plan, ST28: In May 2024, Singtel launched its new growth plan, ST28, which follows the successful completion of a strategic reset started in 2021 to focus on the three areas of connectivity, digital services, and digital infrastructure.
3. Improved financial management and cost savings: Fund Manager AGT Partners highlighted that Singtel's management had launched initiatives to capture cost savings, streamline the asset portfolio, dispose of loss-making divisions, and monetise non-core assets. This resulted in over S$7 billion in capital being released and the net debt-to-equity ratio being reduced from 49% in 2020 to 29% in March 2024.
4. Increased dividend payout ratio: AGT Partners also observed that the dividend payout ratio was increased to 70-90% of net profit, which appealed to long-term yield seekers.

Other stocks that saw significant net institutional buying in H2 2024 included UOB, OCBC, SGX, ST Engineering, Yangzijiang Shipbuilding, SATS, DBS, ComfortDelGro, and Suntec REIT. These stocks attracted net institutional buying due to their strong performance and positive developments within their respective sectors.



The economic fundamentals and performance of these companies have contributed to their appeal to institutional investors. Strong GDP growth, robust performance of major banks, dividend payouts, strategic initiatives, resilience, and growth in challenging conditions, as well as attractive valuations, have all played a role in institutional investors' decisions to buy into Singapore stocks in H2 2024.

In conclusion, the net buying of S$856 million in Singapore stocks by institutional investors in H2 2024 reflects the strong economic fundamentals and performance of local companies, as well as the attractive investment prospects offered by the Singapore stock market. As the STI continues to make progress towards its all-time high, investors can expect further opportunities in the local stock market.