Singapore's US$520 bil market looks past recession risk

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Analysts say Singapore'e trade and electronics cycles are looking sluggish yet its economy has a positive outlook for earnings and dividends. FMTNews

SINGAPORE: Investors are sanguine about Singapore’s equity market even as the nation faces the risk of a technical recession, as a positive outlook for dividends and earnings overshadows threats from the US-China trade spat.

The reason behind such optimism is more than half of the 30-member gauge generate 50% or more of their revenues outside the city-state, hence less influenced by the domestic economy, data compiled by Bloomberg show. Here are three charts showing the divergence of Singapore’s economy from its US$520 billion stock market:A major producer of electronics and semiconductors, Singapore’s trade value is more than double its US$364 billion economy.

The benchmark is trading at a price-to-earnings multiple of 12.8 times on one-year forward earnings, lower than its 10-year average of 13.5, according to data compiled by Bloomberg.

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