HSBC sees Singapore as a standout among Southeast Asia’s markets as region grapples with Covid

SINGAPORE — As most of Southeast Asia continues to grapple with Covid, Singapore stocks are a standout regionally, according to HSBC Private Banking & Wealth Management’s James Cheo.

“We are just generally a little bit more cautious on Southeast Asia region, but within which, we are actually positive on Singapore,” Cheo, Southeast Asia chief investment officer at the firm, told CNBC’s “Street Signs Asia” on Wednesday.

He cited Singapore’s improving management of the pandemic as a factor behind this view. The country has gradually started to ease social distancing measures that were re-imposed in early May.

In contrast, several other countries in Southeast Asia have been struggling with a surge in infections.

Vaccination rates in Singapore have also far surpassed those of its regional peers.

As of July 12, 40.47% of Singapore’s population was fully vaccinated against Covid-19, according to Our World in Data. In comparison, Malaysia had fully inoculated 11.38% of its population while the figure was even lower in Indonesia and Thailand at 5.5% and 4.74%, respectively.

Beyond Singapore’s improving pandemic management situation, Cheo added that economic data and earnings out of the country appear “extremely strong.”

In the second quarter, Singapore posted its strongest economic growth in 11 years, rebounding from last year’s economic slump. In absolute terms, gross domestic product in the April-to-June period this year was still 0.9% below the second quarter of 2019, before the pandemic.

Preference for financials, industrials

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