S'pore could see more fund inflows in 2025 as Trump takes power

Local stocks to gain with investors turning defensive, revitalisation measures: Analysts

- Angela Tan

Singapore could see more capital inflows in 2025, with the stock market poised for another year of outperformance as investors turn defensive and favor the safe haven amid uncertainties over new US policies.

New measures to revitalize the Singapore stock market could also boost trading liquidity and lift valuations as much as 20 percent, narrowing the discount to global peers, said Mr Wilson Ng, an equity analyst at Morgan Stanley Asia.

The Singapore equities market has performed exceptionally well so far in 2024, with a total return of around 30 percent. It has outperformed nearly all markets in the Asia-Pacific region and most major markets globally.

Said Mr Ng: "2025 could be another fruitful year for Singapore against a relatively challenging regional market backdrop."

Policy shifts from US President-elect Donald Trump's incoming administration could have far-reaching implications for global markets, including in the Republic, he said.

Added Mr Ng: "Given a more challenging outlook for Asia-Pacific equities in the year ahead, coupled with uncertainties over new US policy, Singapore could benefit from capital flows pivoting more defensively in favor of safe havens."

When investors take a defensive stance, they take on as little risk as possible and choose stable investment products or markets that have proven themselves over the years.

Goldman Sachs' chief Asia-Pacific strategist Timothy Moe likes Singapore for its defensive market and good dividend yields.

He has a "constructive" view on the three local banks - DBS, UOB and OCBC - which account for more than 50 percent of the benchmark Straits Times Index's (STI) total value.