With many of the regions major indexes competing for the number one spot as Asia’s best-performing stock market, Singapore has just climbed to the top.
Eight of the regions largest equity indexes have reached new all-time highs in only four months alone. Singapore’s Straits Times Index bounced a whole lot higher on May 2nd, upping the yearly gain to a 6.2 percentage and climbing over Vietnam’s VN Index, which only bounced 2 percent, to the number one spot.
Edward Lim of Covenant Capital Pte. in Singapore said “Singapore’s stock market is very much a reflection of its open economy,” and “It’s really a reflection of the mood in rates and the relatively large exposure that the Singapore stock market has on banks.”
Indonesia and the Phillippines, also two markets to jump to a new record high during 2018 are now at the bottom as some of the worst markets of this year.
A few investors remain skeptical of Singapore’s number one position, still unconvinced that Singapore would hold the spot and stay as the regions best market for long.
Edward Lim goes on to say: “Valuations are actually stretched. If you look at other Asian markets, China still remains our top pick.” According to Bloomberg’s data, Singapore’s Straits Time’s Index is now trading at a slight difference of its 5-year average ratio of trading at a 1-year price to earnings ratios of 14.
Geoffrey Ng, director at Fortress Capital Asset Management Sdn., said “a lot of the gains driven by domestic reasons have been factored in and upside is limited,” when referring to the possibility of the top index jumping another 3 or 4 percent. China indexes are also lower by a whole 6 percent this year in Shanghai and Shenzhen.