Singapore is emerging as one of Southeast Asia's most compelling investment destinations as sweeping capital market reforms create new opportunities for investors seeking to diversify beyond technology and artificial intelligence (AI) stocks, says One Asset Management.
Chief executive Pote Harinasuta said global investors are increasingly concentrated in technology and AI-related companies, leaving portfolios exposed to greater volatility.
By contrast, Singapore's stock market offers a more defensive investment profile, underpinned by strong economic fundamentals and its role as Asia's leading financial hub.
Singapore's economy has expanded at an average annual rate of 4.8% since 2000, outpacing global GDP growth of 3.5%.
Inflation remained low at 1.4% in April, while the Singapore dollar recently strengthened to an 11-year high against the US dollar, reflecting the city-state's sound monetary policy and macroeconomic stability.
According to Mr Pote, a catalyst was the Equity Market Development Programme launched by the Monetary Authority of Singapore. The initiative allocates S$6.5 billion to enhance market liquidity and attract institutional investors, complemented by more than S$13 billion in additional capital from institutional investors.
The reforms aim to improve market efficiency, unlock corporate value, and increase the attractiveness of Singapore's equity market over the long term, he said.
Similar market reforms have generated strong equity returns in other Asian bourses. Since South Korea announced capital market reforms on Jan 17, 2024, the Kospi Index has gained 283%, while Japan's Nikkei 225 has risen 173% since reforms were introduced on March 31, 2023.
Following the announcement of reforms on Aug 2, 2024, Singapore's Straits Times Index has advanced 69.6% through June 25, 2026.
"We believe Singapore has the potential to deliver further gains as the reforms continue to take effect," said Mr Pote.
Singapore's relatively resilient equity market during periods of uncertainty and volatility makes it a diversification option for investors heavily exposed to growth-oriented technology stocks, he said.
The brokerage's ONE-SINGEQ has capitalised on growing opportunities in Singapore, while ONE-SINGEQ-UH invests in the Singapore market via a feeder fund structure. The new fund is open for subscription from July 7-16.
