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Investors pulled $2.2 billion from Thailand, Indonesia and the Philippines in August, versus inflows of $6.8 billion in 2012.
Wellian Wiranto at Barclays said Singapore is a barometer for Southeast Asia; choppiness elsewhere cause ripples in Singapore.
Khiem Do at Baring Asset Mgmt said Singapore’s stock market benefited from loose monetary policy in the past few years as shares offered investors attractive dividend yields. Do said Singapore has been affected by redemptions from Asean since it’s the biggest market and is being lumped together with Indonesia, Thailand and the Philippines where capital outflows have accelerated.
Kelvin Tay at UBS said Singapore is likely to outperform, given its strong currency, resilient domestic economy, good earnings-growth potential and exposure to developed markets’ recovery. UBS said Singapore was its preferred market in Southeast Asia, upgrading its rating from neutral.
Singapore’s Straits Times Index is at 14 times estimated earnings versus 16.1 for the FTSE Bursa Malaysia KLCI Index, 17.4 for the Philippine Stock Exchange Index, and 10.4 for Hong Kong’s Hang Seng Index.
The Straits Times Index offer an average dividend yield of 3.4 percent versus 2.7 percent for 10-year Singapore government bonds.
Daphne Roth at ABN Amro Private Banking sees little catalyst for the Singapore market to recover, and as investors begin to price in rising interest rates, Singapore’s high-yield REITs become less attractive.
Nader Naeimi at AMP Capital Investors said Singapore is getting hit from two sides: being lumped together with other Southeast Asian markets like Indonesia and the Philippines and investors selling high-yield Singapore REITs as bond yields are rising.
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