SINGAPORE (Nov 26): Singapore’s stock market is unlikely to throw up much of a fuss if trade talks fail between the world’s two largest economies, according to Oversea-Chinese Banking Corp.
Even in the bear case where U.S.-China negotiations produce nothing, the Straits Times index will slip less than 1% over the next year, said Carmen Lee, OCBC’s head of investment research. Cheap valuations plus a recovery in earnings and dividends will keep the downside in check, she said.
“Valuations are inexpensive, dividend yields are high and price-to-earnings is below average,” Lee said. Cost reduction and rate cuts will aid earnings, she added.