Singapore Stocks Set To Soar?

Singapore Stocks Set To Soar?

over 3 years ago2 mins

Mentioned in story

Singapore’s biggest stocks may have fallen 20% this year – but according to investment bank Morgan Stanley, the Southeast Asian city-state’s shares could prove a potent cocktail in the coming months 🍹

What does this mean?

The MSCI Singapore Index tracks the stock prices of the top 25 companies listed on the Singapore stock exchange, together accounting for 85% of the local market’s total value. Reflecting the makeup of the Singaporean economy, almost half the index’s value comes from financial companies, with real estate firms accounting for 20%.

Following an impressive initial comeback from the last financial crisis, Singaporean stocks have had a mixed few years. And after performing just half as well as the MSCI World Index of global stocks in 2019, 2020 has been a shocker. In contrast to the rapid recovery of, say, big US companies’ share prices, the MSCI Singapore remains 23% below where it started the year.

Source: MSCI
Source: MSCI

But a report from Morgan Stanley late last week suggests that things can only get better. Rising economic and geopolitical uncertainty elsewhere in Southeast Asia – most notably in the rival financial hub of Hong Kong – have coincided with a big inflow of money to Singapore, which may be seen as a “safe haven” in troubled times 🕊️

Why should I care?

In calling the bottom for Singapore’s stocks, Morgan Stanley thinks investors can expect up to 14% returns over the next 12 months. Cash hasn’t just been flowing into the local bank accounts of the super-rich recently; Singapore’s stock market is a major hub for international real estate investment trusts (REITs), and their relatively high dividends are attracting attention from investors.

Such strong and sustainable dividends are seen as a hallmark of Singaporean stocks overall – and particularly of those companies which stand to benefit from a strong economic recovery. Morgan Stanley points to the likes of local lender United Overseas Bank and industrial landlord Ascendas REIT on this score 👈

For those looking to keep things simple, however, an investment in the *i*Shares MSCI Singapore ETF offers an easy way to track the entire index’s value – which, if Morgan Stanley’s right, should soon be headed up…

The MSCI Singapore Index tracks the biggest stocks’ value by relative size (Source: MSCI)
The MSCI Singapore Index tracks the biggest stocks’ value by relative size (Source: MSCI)
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG