Singapore, a Heavy Exporter at a Low Multiple

Watch the video with Andrew Stotz or read a summary of the country profile on Singapore.



Four Pillars of GDP: Driven by net exports

Overall, growth in Singapore has remained slow. Unlike most of its peers in Asia, who are often led by private consumption, the Singapore economy is driven by net exports. Net exports were large enough to outpace a large contraction in investment.

Cheap valuations and high yields

Singapore has a cheap valuation as a whole due to relatively weak fundamentals. Only Taiwan offers a higher dividend yield than Singapore, according to consensus estimates going into 2017.

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#Singapore, a Heavy Exporter at a Low Multiple

A. Stotz Four Elements: Singapore’s rank relative to Asia

Overall, Singapore has a moderately attractive market in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.

Fundamentals: Singapore has a poor return-on-equity below 10%.

Valuation: However, the market features attractive low valuation multiples and a high dividend yield.

Momentum: The country has poor earnings momentum, though price momentum is moderate.

Risk: The market offers low volatility and a relatively low beta to Asia ex-Japan.

Strong performance in Energy and Financials

Top 3 largest sectors: Industrials: 26% of the market. Real Estate: 22%. Financials: 19%.

Best sector & stock: Energy: +21.3% & Ezion Holdings: +43.1%

Worst sector & stock: Telecom: -7.2% & M1 Ltd: -21.0%

 


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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

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Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.