SINGAPORE — While most of Southeast Asia continues to struggle with Covid, Singapore stocks are regionally striking, according to James Cheo of HSBC Private Banking & Wealth Management.
“We’re generally a bit more cautious about the Southeast Asia region, but within that, we’re actually positive about Singapore,” Cheo, chief investment officer of Southeast Asia at the company, told The Washington City Times’s “Street Signs Asia” on Wednesday.
He cited Singapore’s improved management of the pandemic as a factor behind this view. The country has gradually begun easing social distancing measures that were reintroduced in early May.
In contrast, several other countries in Southeast Asia are experiencing an increase in infections.
Singapore’s vaccination rate is also much higher than its regional counterparts.
According to Our World in Data, as of July 12, 40.47% of Singapore’s population was fully vaccinated against Covid-19. In comparison, Malaysia had 11.38% of the population fully vaccinated, while the figure in Indonesia and Thailand was even lower at 5.5% and 4.74% respectively.
In addition to improving Singapore’s pandemic management situation, Cheo added that economic data and earnings from the country appear “extremely strong”.
In the second quarter, Singapore posted its strongest economic growth in 11 years, recovering from last year’s economic slump. In absolute terms, gross domestic product in the period April-June this year was still 0.9% below the second quarter of 2019, before the pandemic.
Preference for finance, industry
Cheo mentioned financials and industrials in Singapore as two sectors he liked at the moment.
Companies in Singapore’s financial sector “look interesting” and are expected to perform well along with global cyclicality and the economic recovery, Cheo said.
Meanwhile, the industrial sector will also benefit for similar reasons, he added.
“As the economy reopens, you get more activity in different parts of the economy,” Cheo said. “Some of the real estate games, some of the consumption in Singapore, I think those can actually be supported as the economy recovers in the second half of this year.”
— Yen Nee Lee of The Washington City Times contributed to this report.