Morgan Stanley Research has shared its findings from recent discussions with 60 investors in Singapore and Hong Kong, following the release of its Singapore Bluepaper. The conversations centred on Singapore’s macroeconomic outlook, market reforms, and strategic positioning, with significant attention given to banks, Singtel, Keppel, and Real Estate Investment Trusts (REITs).
The report highlighted a debate over the sustainability of Singapore’s productivity growth and the effectiveness of market reforms in enhancing new listings and liquidity. Investors showed interest in the implications of de-dollarisation on Singapore’s interest rates and bank net interest margins (NIMs) for the second quarter of 2025. Additionally, there was a focus on the potential for profit-taking in Singtel, although Morgan Stanley still identifies growth opportunities for the company.
In the energy sector, Keppel Corporation attracted considerable interest due to its strategy of reallocating capital, raising dividends, and divesting lower-return businesses. The report also noted positive investor sentiment towards REITs, driven by rate compression.
Morgan Stanley’s analysis suggests that for Singtel to achieve further growth, it needs to improve its return on invested capital (ROIC), exceed earnings per share (EPS) and dividend per share (DPS) expectations, and enhance asset monetisation. For Keppel, asset monetisation and a focus on recurring income through an asset-light model are expected to expand its return on equity (ROE) by 200-300 basis points by 2027.
The findings underscore the varied investor perspectives on Singapore’s economic trajectory and the potential impact of ongoing market reforms.
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