The post-pandemic era has arrived in Singapore, says Daniel Moss on Bloomberg. Last week the city-state scrapped limits on group size and office working. “Many venues will no longer require folks to check in with the government contract-tracing app.” After two years of “uber-caution”, authorities have shifted with uncharacteristic haste. Fear that “onerous rules” were denting Singapore’s position as “a premier aviation hub” helped drive the decision to re-open. Trade-dependent Singapore “cares deeply about its reputation abroad”.
“The Singapore market stands out as a shelter in the current stagflation environment,” says Paul Chew of Phillip Capital. “Almost every sector… enjoys a tailwind. Transport, telecoms, retail and hospitality, which make up 20% of the Straits Times Index (STI), will benefit from the reopening of borders. Banks, which account for 45%, will get a “huge lift” from rising rates: a one percentage point rise in interest rates could increase earnings by 18%. The tech sector – once hot, but now struggling globally – is just 2% of the STI. The biggest Singapore-based tech stock is video games and e-commerce firm Sea, which is listed in New York instead. It’s down 61% this year.
That mix has helped the STI gain a healthy 7.5% this year (the MSCI Singapore index – which includes Sea – is down 6%). It doesn’t make up for an annualised return of just 5.2% in the five years to 31 March – partly due to its high weighting to financial stocks – compared with a global average return of 13%, but the long spell of underperformance has left it looking comparatively cheap. “Current valuations remain undemanding,” reckons Adrian Loh of UOB Kay Hian. At 3,350, the index is trading on 13.5 times forecast earnings for 2022, with a forecast yield of 4.1%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Renewable investing: who is paying for the green revolution?Investors in renewables have not been rewarded, says Bruce Packard. Will they fund the government’s plans?
-
UK house prices rose 4.6% last year – where did property prices grow most?House prices increased by 4.6% in 2024, giving an average property price of £268,000. Where did property prices grow the most and will they continue to rise this year?
-
Renewable energy investing: who is paying for the green revolution?
Investors in renewables have not been rewarded, says Bruce Packard. Will they fund the government’s plans?
-
The best ways to invest in Vietnam – Asia’s communist dynamoVietnam has long been one of our favourite markets. The prognosis remains auspicious, says Alex Rankine.
-
India is a new global powerhouse — should you invest?India’s growth rate has slowed recently, but there is still ample scope for investors to benefit from its development.
-
Why Chinese stocks are so far out of favourThere’s little appetite for Chinese stocks despite low valuations.
-
Three companies that dominate their markets with critical productsA professional investor tells us where he’d put his money. This week: Charlie Huggins, manager of Wealth Club’s Quality Shares Portfolio, picks three stocks.
-
Should you continue to hold Smithson Investment Trust?Opinion Smithson Investment Trust, a small- and mid-cap fund, has struggled to live up to lofty expectations, says Rupert Hargreaves.
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Trump's tariffs and a shrinking market for alcohol deal double blow to DiageoDonald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
