Singapore, a Heavy Exporter at a Low Multiple

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.

In 1992 Dr. Andrew Stotz, CFA, left a management career at Pepsi-Cola in California to teach finance in Thailand. In 1993, he found his life calling as a financial analyst, a job for which he was eventually voted #1 in Thailand. In the second half of his 20-year career in investment banking, Dr. Stotz was a Head of Research, leading teams of financial analysts. He served as a two-term president of CFA Society Thailand and now runs his firm, A. Stotz Investment Research, which provides research and tools for institutions and high-net-worth investors and helps CEOs make their companies financially world class.
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