Singapore’s dollar will underperform most regional counterparts this year as a pickup in the global economy and faster growth among its peers reduces demand for the republic’s top-rated securities, according to HSBC Global Asset Management and Mizuho Asset Management Co.
Interest in the slowest-growing nation of Southeast Asia’s five-biggest economies will diminish in 2013 as returns waver, Gordon Rodrigues, investment director at HSBC Global Asset in Hong Kong, said in a Jan. 14 interview. Prime Minister Lee Hsien Loong said on Dec. 31 that the $240 billion economy will expand 1 percent to 3 percent this year, less than the past decade’s 6 percent average.
Gross domestic product in the Philippines, Thailand and Malaysia may rise at almost double the pace of Singapore in 2013, official forecasts show, where 10-year bonds offer yields that are more than twice those in the city-state. The baht, ringgit and peso are among the best-performing currencies in Asia this year, as the U.S. fiscal agreement and Europe’s easing debt crisis, bolstered demand. Singapore’s dollar has weakened.
“From a point of view of potential in the region, other currencies have potential for more appreciation,” said Rodrigues, whose company oversees $32 billion of Asian fixed income. “If the market is in a risk-taking mode, given the low- growth outlook for the Singapore economy, there’ll be less interest in money flowing to Singapore.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.