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
-
Ben Cohen: The Ben & Jerry’s co-founder who wants to break away from UnileverBen Cohen of Ben & Jerry’s ice cream is seeking to break away from Unilever, the conglomerate he sold out to in 2000. It’s a battle for the soul of the brand synonymous with corporate do-gooding.
-
Trump wants to colonise Mars – will it happen?Donald Trump wants to plant the US flag on Mars. Could humans really live there?
-
Falling revenues and mounting debt spell trouble for Jumia TechnologiesStruggling African e-commerce platform Jumia Technologies looks headed for the exit, says Dr Matthew Partridge.
-
Next reports £1 billion in annual profits for the first time – what's next for the retailer?Clothing retailer Next has become only the fourth member of its sector to surpass £1 billion in annual profits. What does this mean for the company's future?
-
Best of British bargains: cash in on undervalued companies in the UK stock marketOpinion Michael Field, Chief Equity Market Strategist, EMEA, Morningstar, selects three attractive UK stocks where he'd put his money
-
Building firm Keller presents low debt and ample scope for growthGeotechnical contractor Keller, which supports vital global infrastructure, boasts rising profits and a cheap valuation
-
PZ Cussons share price down 75% in last decade – why it's one to watchOpinion Once-strong consumer-goods business PZ Cussons is out of favour with the market. That spells opportunity for investors, says Jamie Ward
-
Cash in on the biotech sector with specialist trust BioPharmaOpinion BioPharma has an attractive niche in lending to asset-rich biotechnology companies
-
India's stock market decline wipes out $1.3 trillion in market value – can investors stay optimistic?More than $1 trillion has been wiped off from India's stock market after investors turn to China. Has the emerging-market darling hit rock bottom?
-
Pensions revolution: how to profit from the trends shaping the UK pension systemThe UK pension system is one of the biggest in the world. Big changes are under way, says Rupert Hargreaves
