UBS says QE2 will benefit Singapore, “not by re-rating nominal asset prices per se, but by lifting regional demand for consumer and investment services, which would play into Singapore’s strength as a regional hub.”

Says stocks appear inexpensive vs bonds; latter have heavily re-rated as inflows chase SGD appreciation.

Reckons market may be underestimating potential for corporate re-leveraging, expects cash-generative companies to engage in capital management or speed up capex, M&A plans in 2011.