Singapore Stocks Post Biggest Gain in Five Months on Biden Hopes
(Bloomberg) -- One of Asia’s worst-performing stock markets got some respite on Tuesday ahead of the U.S. presidential poll as investors gear up for a Biden win.
The Straits Times Index closed up 2.2%, its biggest rise in five months, and climbed the most among all major indexes in Asia Pacific. All 30 stocks were in the green, with industrials, property and banking shares among the top gainers as investors bought into the gauge dominated by old-economy sectors.
“All polls are predicting a Biden win so this is investors positioning themselves” in beaten-down shares, said Joel Ng, analyst at KGI Securities (Singapore) Pte.
Investor expectations of a Blue Wave have swept across global markets, with money managers betting more fiscal spending by a Biden-led administration will spur growth and spark a rally in value and cyclical shares. BlackRock Inc.’s research arm on Monday upgraded Asia ex-Japan equities to overweight from neutral on the likelihood of a Democratic sweep and better virus containment in the region than the West.
In Singapore, where there are less than 100 active virus cases, more than 80% of the stock benchmark is made up of cyclical stocks excluding the tech and communication services sectors.
The index is currently trading at 14 times estimated earnings over the next year, in line with its 10-year average. In comparison, the MSCI Asia Pacific Index is trading at a multiple of 16 times, much higher than its historical average of 13 times.
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