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Singapore stocks’ winning run threatened by economic headwinds

Bloomberg Published on Fri, Dec 02, 2016 / 5:25 PM GMT+8

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SINGAPORE (Dec 2): Singapore’s stock index is set to post the biggest increase in Asia this week, driven by its longest winning streak in two years. The party may be short-lived.

The city-state’s Straits Times Index climbed 2.4% this week to 2,928.58 on Thursday, making it the seventh-best performer globally. The gauge has risen for eight straight days, the longest stretch of gains since December 2014. It is also still one of Asia’s cheapest stock markets — the Straits Times Index is trading at 12.4 times reported earnings, the lowest in the region after Pakistan — as investors remain cautious about further gains.

“After this rally, what you need is for fundamentals to be sustainable,” said Kelvin Tay, regional chief investment officer at UBS Group AG’s wealth management unit in Singapore, who predicts any advance beyond the 3,000 level may be limited. “At this point in time, there are no real catalysts to change that.”