Chart of the Day: Singapore beats Asean countries over earnings revisions

Revisions of earnings per share (EPS) is expected to hit 8% in 12 months.

This chart from Morgan Stanley shows that Singapore outpaced other ASEAN countries such as Thailand, Indonesia, Malaysia, and the Philippines over its positive earnings per share (EPS) revisions. EPS revision, which is linked to stock performance, can measure whether a company is performing well or not.

In 12 months, EPS revisions in Singapore are expected to jump slightly over 8%. In Thailand, they are expected to hit 2%.

EPS revisions in Indonesia, Malaysia, and the Philippines are expected to be negative in 12 months at -2%, -0.2% to -0.5%, and -2.5%, respectively.

"The Philippines is still struggling with earnings estimate revisions," said equity strategist Sean Gardiner.

Meanwhile, Morgan Stanley expects that the bout of positive earnings estimate revisions in Singapore will slow. Analyst Nick Lord said banks (48% of MSCI Singapore) have seen a 15% increase to 2018 earnings expectations over the last 12 months, with 5% year to date.

He thinks consensus now better reflects the earnings power of the banks. But, he said, "Positive surprises on the rate curve (from US rate hikes) could push through some increases in net interest margins (NIMs)."

For now, Singapore is Morgan Stanley's "top pick" with 14% EPS growth.