Singapore's stock market has entered a softer phase.
The Straits Times Index has enjoyed a strong year, but of late it has handed back a portion of those gains.
At the close on 14 October 2026, the index stood 7% beneath its 52-week high.
Even so, the SPDR STI ETF, which tracks the index, has delivered a 19.8% return year to date (YTD), with dividends included.
Three blue chips have performed even more strongly.
Three Temasek-Backed Blue Chips: Financials and Dividends
DBS Group Holdings Ltd has posted a total return of 37%.
Singapore Technologies Engineering Ltd, or ST Engineering, has returned 26.1%, while Singapore Exchange Limited, or SGX, has returned 24.3%.
The three share something else in common.
Temasek, a global investment company headquartered in Singapore, held 28% of DBS and 51% of ST Engineering as at 31 March 2026.
It also held 23.35% of SGX through SEL Holdings as at 1 September 2026.
Is Temasek the secret ingredient? Probably not.
In a 2011 letter, Temasek said it plays no part in SGX's governance or operations, and that the law bars SEL Holdings from voting its SGX shares.
The better explanation lies in the businesses themselves.
Can SGX keep raising its dividend if trading cools?
For its fiscal year ended 30 June 2026 (FY2026), SGX grew net revenue by 13.9% year on year (YoY) to S$1.5 billion.
Equities – Cash revenue rose 28.1% to S$502.9 million as securities daily average traded value climbed 34.9% to S$1.8 billion.
Reported net profit rose a more modest 7.8% to S$698.4 million.
A S$53.4 million goodwill impairment on Scientific Beta and weaker investment gains weighed on the figure.
Strip those out, and adjusted net profit grew 24.6% to S$759.5 million.
SGX has proposed an ordinary dividend of S$0.445 per share for FY2026, plus a one-off dividend of S$0.125.
That brings the total to S$0.570, compared with S$0.375 for FY2025.
The bourse operator held S$1.8 billion of cash against S$628.2 million of borrowings, and it plans to repay all its debt in FY2027.
Management has also guided for quarterly dividend increases of 0.25 cents through FY2028. Investors may be paying up for that visibility.
Here's the thing: SGX earns more when markets are busy.
A long lull in trading would test its medium-term target of 6% to 8% revenue growth, excluding treasury income.
How is DBS growing profit while interest rates fall?
Falling rates tend to squeeze banks, and DBS felt it.
For the second quarter of 2026 (2Q2026), net interest income slipped 2% YoY to S$3.6 billion.
The net interest margin (NIM) narrowed to 1.87% from 2.05%.
Total income still rose 6% to S$6.1 billion, crossing S$6 billion for the first time.
How?
Non-interest income rose about 21% to S$2.5 billion, with wealth management fees up 42% to S$919 million.
Net profit climbed 9% to S$3.1 billion, for a return on equity of 17.9%.
The non-performing loan ratio held steady at 1.0%.
In other words, investors may be rewarding a bank that depends less on interest rates.
For 2Q2026, the board declared an interim dividend of S$0.66 per share.
It also declared a separate capital return dividend of S$0.15 per share, bringing the quarter's total to S$0.81.
Management has raised its full-year guidance and expects 2026 total income to exceed 2025's level.
The risk? Margins could come under more pressure if rates keep falling.
Can ST Engineering's order book fund a rising dividend?
ST Engineering's operating profit is growing faster than its sales in all three segments.
For the first half of 2026 (1H2026), revenue rose 11.1% YoY to S$6.6 billion, while net profit climbed 27.1% to S$512.1 million.
Commercial Aerospace and Urban Solutions & Satcom each grew revenue by 15%.
Rail and tolling deliveries lifted the latter's operating profit fourfold.
Cash generation kept pace.
Free cash flow rose 22.1% to S$591.6 million.
Shareholders received S$0.09 per share for the half, up from S$0.08 a year ago, and the group plans another S$0.05 for 3Q2026.
The order book hit a record S$35.7 billion.
About S$5.7 billion of that is due for delivery over the rest of 2026.
Investors may be pricing in that visibility.
Watch the balance sheet. Cash fell to S$255.3 million at 30 June 2026, from S$576.4 million at end-2025.
Borrowings, which include lease liabilities, eased to S$4.7 billion from S$4.8 billion.
Free cash flow is what fuels dividends, and ST Engineering needs it to keep growing to cover its debt and a rising payout.
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