How attractive are Singapore stocks? – Global Stock Market Valuation

It is widely known that US stock markets are on record highs on the back of Trump-inspired ‘reflation trade’ and leading the pack are ‘FANG’ stocks an acronym for Facebook, Amazon, Netflix, Google, the most popular and high performing tech stocks in recent years.

The sentiments at home in Singapore are not quite jubilant as threat of stagnant GDP growth and gloomy real estate market drags the stock market into oblivion. In recent months we have seen a number of high profile buyouts and delistings with companies looking at our regional counterparts as better options to raise capital.

Despite that, the index up 12.3% for first half of 2017, a steady recovery after  2016’s full year performance of -0.29%.

There are questions lingering in our minds; how are Singapore stocks going to perform relative to other stock markets moving forward?

Are Singapore stocks attractive for domestic and foreign investors?

Here we look into 5 valuation metrics comparing stock markets globally:

CAPE Ratio: Also known as Cyclically Adjusted Price to Earnings Ratio, common used for valuation of US S&P 500. It is defined as price divided by the average of ten years of earnings, adjusted for inflation.


Singapore ranks 7th with CAPE at 12.8.

Price to Earnings Ratio (P/E): Per share measure of stock price to total net profit of companies.


Singapore ranks 7th with P/E 12.9.

Price to Cash flow(P/CF): Per share measure of stock price to operating cash flow


Singapore ranks 22nd with P/CF 10.2

Price to Book Value: Per share measure of stock price to Net Asset Value


Singapore ranks 4th with P/B 1.2

Dividend Yield %: Historical dividend as percentage of stock price


Singapore ranks 23rd with Dividend yields at 3.1%

Singapore stocks ranked on lower quintiles of CAPE, P/E and P/B ratios while ranked in median range for P/CF and Dividend yield.

Despite steady recovery since the start of 2017, Singapore stocks are still relatively undervalued when compared to regional counterparts. In recent times, the market seems to be concern about geopolitical tensions and is creating negative sentiment on risky assets i.e stocks. As value investors, we should take advantage of short term price fluctuations to accumulate value stocks for the long term.

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