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Goldman upgrades Singapore back to 'market weight'
A YEAR after it downgraded the Singapore market to "underweight" over concerns over the energy and property sectors in Singapore, investment bank Goldman Sachs has upgraded the market back to "market weight".
The bank's chief Asia-Pacific equity strategist, Timothy Moe, argued that valuations have come down significantly and bad news has been priced in, including in the decimated oil and gas sector.
"There's no way we think Singapore is an 'overweight' to be clear," Mr Moe said in a media briefing on Thursday evening.
However, Goldman expects Singapore corporates to grow their earnings by 7 per cent next year. The market is also trading cheaply relative to history, at 1.2 standard deviations below its 10-year average, Mr Moe said.
Singapore's banks, which form a significant proportion of the MSCI Singapore index here, should start benefiting from rate hikes in the US next year, which will improve earnings, he said.