Morgan Stanley Research has reaffirmed its positive outlook on Singapore, projecting a robust return on equity (RoE) of 14% by 2030, supported by a price-to-book (P/B) re-rating to 2.3x. The report identifies Singapore’s strategic position as a “hub of hubs,” its swift adoption of new technologies, and proposed equity market reforms as key drivers of its structural wealth creation.
The report underscores Singapore’s defensive stance in a multipolar world, highlighting its macroeconomic stability, strong governance, and financial resilience. Morgan Stanley emphasises that Singapore’s corporate sector is shifting towards higher-return business models, particularly in banking, where wealth management businesses are expanding. This shift is expected to result in higher dividend payouts and buybacks.
Morgan Stanley’s analysis suggests that ongoing equity market reforms are beginning to attract institutional investors, with large-cap companies like Sembcorp, DBS, and SGX poised to benefit from initial inflows. The Monetary Authority of Singapore (MAS) has already introduced the first set of reform measures, with more expected in the latter half of 2025.
However, the report cautions that potential risks include a slowdown in global trade, financial decoupling between the US and China, and slower-than-anticipated market reforms. Despite these challenges, Morgan Stanley maintains Singapore as a key Overweight market alongside India, Japan, and Brazil, assigning a 100 basis point Overweight recommendation in its regional market allocation framework.
In conclusion, Morgan Stanley’s report positions Singapore as a leading market for investment, driven by its strategic economic initiatives and resilience in the face of global uncertainties.
“`
