Catching up to Wall St and greater diversity: A market wish list for 2020

IF one were to draw up a wish list for the local stock market and economy for 2020, what might it contain?

The first might be for local stocks to play catch-up to Wall Street. US stocks are at all-time highs after a series of rate cuts by the Federal Reserve, but the Straits Times Index is some 16 per cent below its record high that was set 12 years ago in October 2007. Local investors might therefore justifiably wish for a return of the "Singapore is a defensive laggard" theme which periodically surfaced in the past and underpinned the bull runs of 1999 and 2007 but has not featured for more than a decade now.

A second wish would be for greater diversity in new issues. This year's public offers have raised an impressive S$3.06 billion across 11 deals compared to S$730 million across 15 listings last year, but 96 per cent of 2019's offerings have come from four real estate investment trusts (Reits) and business trusts. The heavy concentration in yield-oriented instruments like these is undoubtedly welcome in a world of rock-bottom interest rates, but observers have expressed a wish for more companies in cutting-edge technology segments to list here.