Smaller STI Futures, Bigger Singapore Market Opportunities

11 Mar 2026

The SGX Straits Times Index (STI) Futures contract is a derivative instrument based on the STI Index. Trading STI futures is equivalent to trading a synthetic portfolio representing the 30 constituent stocks of the STI listed on the Singapore Exchange. This provides broad market exposure and reduces reliance on individual stock selection, while diversifying risk across multiple blue‑chip companies instead of a single security.

STI Futures will trade in smaller notional size from 9 March 2026

Effective from 9 March 2026, STI Futures will trade in a reduced contract size of 1/5 of its original value, SGX STI Futures contract essentially becomes a micro contract with a smaller notional value of approximately SGD10,000 and a finer tick size of 0.5 index point.

The contract provides flexibility for investors to trade bi-directionally, supporting effective hedging and protection strategies against declining equity markets.

Budget 2026

FY2025 overall fiscal surplus was S$15.1bn (1.9% of GDP), more than double the estimated surplus of S$6.8bn, driven by higher-than-expected corporate income tax collections and strong revenue from asset-related fees like Certificate of Entitlement (COE) premiums. FY2026 is expected to record a surplus of S$8.5bn (1% of GDP).

AI Focus: The FY2026 budget made a strategic pivot on AI. It comes from S$37bn in research spending, tax deductions, and AI-related grants, with PM Wong chairing the new National AI Council.
Capital Markets: There will be a S$1.5bn top-up to the Equity Market Development Programme (EQDP), bringing it to S$6.5bn; S$1bn to enhance Startup SG Equity for growth-stage financing; a Lifetime Retirement Investment Scheme for CPF members; and a second S$1.5bn Anchor Fund for high-quality public listings. The next batch of EQDP managers is expected to be appointed mid-2026.
Handouts: S$500 CDC vouchers for 1.4mn Singaporean households in January 2027, and S$200–S$400 in cost-of-living special payments (Income <= S$100k).
Real Estate: Ramping up of supply of HDB flats, with 19,600 BTO flats to be launched in 2026, as part of a plan to offer ~55,000 flats from 2025 to 2027.

We maintain a constructive view on Singapore equities, but cautious near-term, conditional on de-escalation in the Middle-East. Near-term, the market will remain sensitive to Middle East developments, but beyond this volatility, the Singapore equity market remains fundamentally attractive.

Investors will likely need one or more of these before stepping back into markets: a) extreme cheap valuations (not there yet), b) clear de-escalation headlines, or 3) enough time passing to establish confidence that the conflict is contained.

Further escalation, particularly with regards to the new or increased involvement of other countries in the region, and a prolonged halting of traffic in the Strait of Hormuz remains the key risk.

Trade the Straits Times Index Futures and other Asian indices from as low as $0.98*, or take a view via index ETFs, Stocks or CFD now. Open an account here.

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An Exchange Traded Fund (ETF) is a marketable security that is formed to track nearly anything, ranging from a specific index, sector, commodity, or increasingly, theme. They are most commonly used to track a basket of stocks, and can typically be accessed through the same channels as regular stocks. ETFs are typically separated into passively-managed ETFs that simply mirror the security they are tracking (e.g. the STI), and actively managed ones that attempt to deliver higher returns or specific investment objectives, often with a pre-specified theme in mind (e.g. ARK Invest’s Innovation ETF).

Why should I trade in ETF CFDs?

ETFs have been growing in popularity over the years. 2020 was the best year for ETFs yet, with global equity ETFs seeing more than $1T in inflows within a 12-month period. Using CFDs to gain exposure to ETFs allows for greater capital efficiency because only a portion of the contract value is required as margin to establish a position.
ETFs are particularly popular with investors seeking a relatively hassle-free investing experience, while desiring exposure to a range of specific and relatively understandable securities. Trading ETF CFDs brings greater convenience by eliminating the need for traders to hold multiple currencies in order to access global ETFs.
An investor wanting exposure to the post-pandemic economic recovery could open a position in the well-known SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500. Another investor that may be convinced of the future importance of Environmental, Social and Governance concerns (ESG) may find the increasing selection of ESG-themed ETFs that track a basket of high ESG-rating companies to be a good investment, rather than cherry-picking individual equities by hand. ETF CFDs can act as a powerful tool for traders can profit from both directions of the market by taking on long or short positions.

A look at two ETF CFDs we offer:

1) Has the ARKK been sunk?

ARK Innovation ETF (ARKK) ARKK is an actively managed ETF by ARK Invest that invests in a range of companies based on their innovative and industry-disrupting potential. ARKK’s largest holdings are in companies such as Tesla, Square, and Zoom. ARKK is down around -33% from peaking on 12^th Feb and is currently in the red for the year to date as the market experiences a risk-off outflow of funds. Superstar fund manager Cathie Wood has however been consistently doubling down on her bets, buying even more shares in growth stocks that are going through their own tumultuous periods such as DraftKings, Peloton, Teladoc, and Tesla. In her view, ARKK is playing the long game, and remains steadfastly convinced in the long-term prospects of these growth stocks beyond this current bout of volatility. Similarly on outflows, investors are still betting big on ARKK as ARK Invest has only lost about $1.2B in assets this year across all its six funds, compared to seeing an inflow of $15.1B during the same period. Recently, investors have been nervously eyeing ARKK’s basket of tech stocks as their future earnings potential remain vulnerable to erosion through high inflation – the dominant concern of the market in recent weeks. As commodities – the major contributor to the recent heightened inflation fears – drops sharply from record highs, are investor concerns over hyperinflation overblown?

2) Searching for exposure to Asian equities?

iShares MSCI Asia ex Japan ETF (AAXJ) The AAXJ is currently trading -10.6% adrift of all-time highs seen in February, giving up gains in tandem with an Asia-wide equity sell-off at the time. Given that slightly over 40% of the ETF’s holdings are based in China, the ongoing tumult seen in Chinese equities currently have carried over nearly perfectly in the AAXJ, as Chinese investors take a breather after the stellar gains made over the past year. Looking ahead, Asia – and particularly China, is steaming ahead with its economic recovery. China is widely expected to be one of the best-performing major economies this year, providing a major boost to the outlook for corporate earnings. As the rest of Asia and the world gradually opens up their own economies, AAXJ is likely to again benefit from strong Asian outperformance amidst a strengthening trade outlook.

CFD is available for trading on Phillip MetaTrader 5 (MT5).

Features of trading CFD:

Trade in both the bull and the bear markets
The ability to enter a long and/or short position allow traders to take advantage of both rising and falling markets.
Smaller barrier to entry
Flexible and smaller contract sizes. This means that traders will be able to enter into a contract with a modest amount of capital.
No expiration date or risk of delivery
Unlike futures which commonly have a fixed expiration date, CFD allows traders to perpetually hold the position(s). CFD is cash settled, no need to worry about the delivery of the underlying asset.

Benefits of using Phillip MT5:

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