According to Zhitong Finance APP, renewed optimism towards banks in Singapore has driven the overall market up, and the Singapore stock market is expected to reach a historical high.

The benchmark Straits Times Index rose 0.9% on Thursday, poised to surpass the closing record set in October 2007. DBS Group Holdings Limited is one of the best-performing stocks in the index, rising nearly 2% in the early trading session.

The recent rally has been mainly driven by the rise in Singapore bank stocks, and analysts emphasize that despite expectations of decreasing interest rates, banks still have the ability to maintain profitability. The banks' stable dividend payments have also attracted investors.

The Straits Times Index has risen 18% year-to-date, becoming the best-performing stock market in Southeast Asia.

Jun Rong Yeap, a market strategist at IG Asia Pte, stated that although banks' net interest margins are narrowing, the pace is still gradual, along with stable loan growth and management of deposit costs, which helps alleviate some of the interest rate pressures.

In October, the Monetary Authority of Singapore maintained its policy, marking its last decision for 2024. However, expectations are growing that the country's monetary authorities will eventually join the global wave of easing.

Yeap stated that the main source of this optimism might be the ability of Singapore's large banks to generate non-interest income. "The momentum in wealth management activities continues to support overall performance, as banks continue to benefit from strong inflow of funds from the region," he said.