Four Pillars of GDP: Export-driven economy
Overall, Singapore is experiencing slow GDP growth, which is mainly driven by exports. Investments and Private consumption constitute a drag on economic growth.
Still cheap, but for a reason
Singapore has among the lowest PE in Asia. But when we look at it relative to previous and estimated earnings growth Singapore doesn’t look attractive.
A. Stotz Four Elements: Unattractive
Overall, Singapore appears second least attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.
Fundamentals: Singapore had the second lowest ROE in Asia over the past 12 months.
Valuation: Attractive, multiples are low and dividend yield high.
Momentum: Ranked worst in Asia, poor earnings and price momentum.
Risk: The market has been moderately volatile.
Top-two performing sectors are a tiny part of the overall market
Top 3 largest sectors: Industrials is 28% of the total market capitalization, Real Estate 22%, and Financials 19%.
Best sector & stock: Information Technology +23.0%, Venture Corporation Ltd +25.2%.
Worst sector & stock: Energy -8.0%, Golden Energy and Resources Ltd -21.1%.
Article by Dr. Andrew Stotz, Become A Better Investor
