Singapore's Long-Term Wealth Creation Set to Boost Local Stocks, Says Morgan Stanley

As Singapore reaches its 60th birthday, investment bank Morgan Stanley believes the city-state is "primed for wealth creation", which could unlock real gains for investors.

- 

As Singapore reaches its 60th birthday, investment bank Morgan Stanley believes the city-state is "primed for wealth creation," which could unlock real gains for investors.

Tapping its global leadership as a data, energy, finance, and transport hub, combined with rapid adoption of emerging technologies, Singapore is set to build upon its extraordinary economic success, the bank said in a report released on June 24.

"The next step forward, we believe, will be wealth creation building upon Singapore's established brand and economic success to further grow the country's capital and global financial standing," it said.

"In our view, Singapore needs to pursue broad-scale wealth creation to keep its aging population both happy and healthy — and, in doing so, could unlock real gains for investors," Morgan Stanley added.

It forecast a five-year gross domestic product (GDP) compound annual growth rate (CAGR) of 3 percent — the highest among developed economies — and expects household net assets to nearly double to US$4 trillion (S$5.1 trillion) by 2030.

The bank also predicts that stock market capitalization will double by 2030.

Morgan Stanley identifies three key pillars set to underpin Singapore's wealth creation.

HUB INDUSTRIES
Singapore's hub industries — spanning energy, finance, transport, and increasingly data infrastructure — now contribute about 63 percent of GDP.

The city-state is already a major center for global energy and metals trade, handling around 20 percent of total trade and hosting more than 400 international trading firms, Morgan Stanley noted.

In finance, Singapore remains a critical hub for Asian foreign exchange trading, insurance, and asset management.