Singapore is one of the most stable and attractive countries in the South East Asia region at a time...
Singapore is one of the most stable and attractive countries in the South East Asia region at a time when many of the surrounding countries are being plagued by political problems..
"Singapore looks interesting," says Robert Hrabchak, head of Asia equity at Credit Suisse Asset Management.
"It has held up reasonably well. At times of market volatility it is viewed as a safe haven in the region. The government is quite stable, it has an excellent infrastructure and it is generally superior to its neighbours."
According to Peter Hames, director of Aberdeen Asset Management Asia, Singapore has some of the best companies in the region, which can be bought at attractive prices. In addition it is leading the way in structural reform in the region, he says.
Naganath Sundaresan, vice president international equities at Credit Suisse Asset Management, says the county's currency will retain its value in contrast with those of other countries in the region, such as Thailand and Indonesia, which have depreciated.
"It is the only country in South East Asia that many international investors see as reasonably attractive," says Sundaresan. "Valuations in a lot of companies are very cheap."
Singapore has good prospects for GDP growth, the projections have been increased from 6.5% to 8.5% with some analysts even predicting it will reach 9%, says Hrabchak.
However, not all is rosy with Singapore. Some two-thirds of its exports are electronics or technology based and there are fears growth rates will slow in the near future. Hrabchak points out a lot of expectations of restructuring were built up last year, particularly with regard to government linked companies.
"Progress in restructuring has been patchy though there is greater realisation than before that it needs to be done," Hrabchak says.
Against the backdrop of strong economic growth and the stable currency, some sectors look particularly noteworthy.
Sundaresan finds the property market attractive. He says: "The office property market is showing signs of buoyancy and optimism and the residential property market is poised to follow suit."
Credit Suisse has holdings in City Development, which has exposure to both office and residential property. It also has holdings in Keppel Land, which is the best way to play the boom in the office property sector, he says.
Hrabchak believes telecoms in Singapore have been performing well and they have made a fair amount of progress expanding regionally, he says.
The banking sector, currently in post crisis mode, looks attractive. Hames points out stocks are quite cheap in regional terms and are financially strong compared to their neighbours.
Aberdeen, which is overweight in the sector, has holdings in OCBC and United Overseas Bank. Credit Suisse is slightly overweight in the banking sector. Credit Suisse is slightly overweight in the banking sector.
It also has holdings in United Overseas Bank and in DBS Bank.
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