Singapore’s equity market to benefit from inflation fears tied to US policies, experts say

SINGAPORE: Morgan Stanley (MS) experts believe Singapore’s equity market could benefit from inflation uncertainty driven by new US tariff and immigration policies, as investors may turn to safer markets.

They noted that policy changes introduced by the US Republican administration could affect global markets, including Singapore.

According to the Singapore Business Review, while the overall policy direction appears settled, details about timing and implementation, which are crucial for investment decisions, remain uncertain.

These potential inflation risks from US tariff and immigration policies may cause fluctuations in interest rates in 2025.

Amid this uncertainty, experts said that this may lead investors to consider safer markets like Singapore.

They added that Singapore’s stock market could also benefit from local government efforts to revive its struggling market.

Experts explained that stronger political will, combined with low market expectations, supports their belief that the upcoming initiatives could lead to significant improvements, even though the details are still being finalised.

MS experts added that these new measures would likely focus on enhancing stock trading liquidity through capital injections, which could boost valuation multiples by up to 20%, helping narrow the gap with global benchmarks.

According to MS, 2025 is expected to be a fruitful year for Singapore despite regional market challenges.

Growth is anticipated to be driven by the revaluation of undervalued stocks, spurred by market reforms and the return of investment funds. /TISG

Read also: Singapore dollar, Malaysian ringgit, and Thai baht face sharp decline in Asia as US dollar surges after Trump’s presidential election victory

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