Singapore equities beat Asian counterparts in June

Concerns with inflation could continue to cap easing by the central bank even as external demand moderates, says HSBC.

According to HSBC, Asia Ex-Japan equities underperformed in June. Singapore was the best performer and Taiwan led the underperformers. Sector-wise, Telecom Services and Utilities did well while the more cyclical Consumer Discretionary and Materials underperformed.

Here's more from HSBC:

Singapore performed relatively well in June. Concerns with inflation could continue to cap easing by the central bank even as external demand moderates. Efforts to raise wages for lower-income groups and further reduce foreign-worker dependency, given low unemployment rate, do not bode well for Singapore’s cost structure and competitiveness.

We continue prefer stocks with regional exposure (such as Keppel Corp and Global Logistics Properties) and would avoid domestic plays with high labour input cost. Singapore continues to be a good space for relatively stable high dividend names offering attractive total returns in a low interest rate environment.