over 3 years ago • 2 mins
There’s a lot of heated back and forth between investment analysts about whether Singaporean stocks – which have fallen about 20% this year – are now worth buying into 🇸🇬
UBS Global Wealth Management is all for buying into Singapore, and says this year’s selloff has left the country’s shares undervalued. Banks in particular – which represent a significant chunk of Singapore’s stock market – look cheap, especially when you compare their share prices to the value of their assets (i.e. their “price-to-book value”) 🏦 That, UBS reckons, is reason enough to start buying Singaporean. And it isn’t alone: investment bank Morgan Stanley mentioned back in June that investors should expect the country’s stocks to rise as much as 14% in the following 12 months.
Goldman Sachs disagrees: it figures banks will struggle to turn a profit while interest rates are so low globally, which means any “cheapness” is probably justified 🤷♀️ Instead, the firm is backing countries with an emphasis on tech and “digital economy” stocks, like China and South Korea.
UBS might’ve been inspired by Malaysia: it’s been one of Southeast Asia’s best-performing stock markets this year, partly thanks to the government support that gave retail investors extra cash to use 🤑 Seeing as Singaporeans are on average six times wealthier than Malaysians, UBS might be hoping the country’s investors follow a similar path. And if economic uncertainty elsewhere in Asia encourages global investors to move money into “safe haven” Singapore, all the better…
While emerging markets like Singapore are risky, investment manager Invesco thinks they’re an attractive investment. That’s partly because the falling value of the US dollar tends to boost economic growth in the regions – their goods and government bonds are typically priced in dollars, after all 💵 – and partly because investors who are fed up with low interest rates will be looking for returns outside the States.
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