SINGAPORE: As Mr Lawrence Wong prepares to become the next Prime Minister of Singapore, following Mr Lee Hsien Loong next month, he will inherit Singapore’s “healthy economy” as the Singdollar surpasses peers with a 40% advance.
Singapore’s currency is strong, and its bonds and stocks are also doing well. Government bonds have also outperformed its global peers by around 16 percentage points.
The Business Times reports that since Mr Lee entered office in 2004, the Singapore dollar has risen around 40% against major trading partners’ currencies. That’s more than double the rise of the US dollar over the same period.
Mr Lee’s reign has seen Singapore’s economy more than double in size, reaching S$532.3 billion, according to Bloomberg-compiled data. Assets under management also climbed more than eight times over to S$4.9 trillion.
Thanks to Mr Lee, Singapore has transformed into a global financial powerhouse and a magnet for top-notch talent. The city-state’s stock market also greatly benefits from the strong local currency.
The Straits Times Index, measured in US dollar terms, has outperformed its Southeast Asian neighbours, outshining the MSCI ASEAN Index by 32 percentage points during Mr Lee’s reign.
However, it’s not all sunshine and rainbows. As per Bloomberg-compiled data, over half of the companies listed locally are trading below their book value. This means there aren’t enough high-growth firms in Singapore’s small, mature economy.
Mr Nirgunan Tiruchelvam, the head behind consumer and internet strategies at Aletheia Capital, suggests there’s room for Mr Wong to “take steps to support local equities.”
He said, “It is possible that the nation’s sovereign wealth funds can invest more money into local markets. He may also look at increasing incentives for listing companies in Singapore market.” /TISG