Singapore Stock Market on sale! Analysts say it’s severely undervalued

SINGAPORE: Insiders said that the Singapore stock market is severely undervalued, supported by metrics such as trading at less than 12 times forward earnings, 0.8 times book value, and offering a substantial 4% dividend yield.

This is despite the Singapore market showing subdued performance in Q4 2023 in comparison to other markets, as indicated by The Straits Times Index (STI) maintaining a range between 3,050 and 3,150 points, The Star reports on Monday, Jan 1.

The STI concluded the year with a decrease of 11.05 points, equivalent to a 0.34% dip from its closing position in 2022.

Maybank Securities’ Head of Research, Thilan Wickramasinghe, noted, “On a price-to-earnings basis, the market is now at a 59% discount to the US S&P 500. This is the biggest discount ever and only touched these levels briefly in the 2020 pandemic.”

Wickramasinghe and his team identified specific sectors poised for growth in the Singapore market. Companies focusing on artificial intelligence (AI), the Internet of Things (IoT), sustainable energy, healthcare, transportation, travel, and industrial real estate are expected to benefit.

Several key themes are anticipated to influence market dynamics. These include government-linked company restructurings, the China-plus-one strategy, near-shoring initiatives, mergers and acquisitions, and advancements in AI technologies.

The China-plus-one investment strategy is a diversification approach where companies avoid sole reliance on China and explore alternative destinations for business expansion. /TISG