SINGAPORE (Dec 18): Credit Suisse expects the SIBOR to rise to 2% by end of 2016, from 1.1325% now, following the much-anticipated rate hike by the US Fed.

Due to the long lead time before the hike finally kicks in, investors have already priced much of the effect in. MSCI Singapore has corrected 21% from its high, versus corrections of 10-19% during the previous tightening episodes in 1994, 2004, and 2013, notes Credit Suisse analyst Gerald Wong in a Dec 17 note.

“In each of these episodes, MSCI Singapore outperformed MXASJ three-month performance after tightening. Across sectors, banks outperformed MSCI Singapore three and six months after Fed tightening in the 2004 and 2013 episodes,” writes Wong.

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