"Calibrated monetary easing and fiscal measures, such as tax
and wage credits for businesses and measures to ease corporate
credit conditions and restore cost competitiveness, provide a
favourable backdrop to support supply-side reforms," HSBC
analysts stated in an investment outlook in
"The government has responded to the structural growth slowdown
with a step-up in inter-agency collaboration to help
industries/companies and workers to cope with structural
challenges, identify and expand new growth sectors as well as
address frictional unemployment and shortfalls in social
policies and infrastructure etc."
However, Singapore’s economic growth outlook
remains fragile, with external weakness spilling into weak
domestic demand and negative repercussions for the labour
market. There is a risk that rising trade protectionism and
antiglobalisation negatively impacts global trade and regional
financial centres such as Singapore.
"The country’s transition from a labour-driven
growth model to a productivity-driven one remains challenging
and incurs short-term pains. Singapore faces the risk from
rising US interest rates," HSBC’s analysts
"A shifting manufacturing landscape, higher corporate and
household debt servicing burden amid worsening profitability
and labour market, tighter financial conditions, and a weak
property market are headwinds.
"Concerns about banks’ asset quality, particularly
their exposure to the oil & gas sector, linger, although
lending to the sector accounts for a small portion of the total
loan book and the recent rebound in oil prices, if the trend
sustains, may help mitigate such risk.
ICBC Standard Bank: Expert eye on
Singapore is the main financial centre for South East Asia.
There are no legal impediments to conducting GMRA business and
the local market is mature and well established.
There is a great deal of activity in US dollar-denominated
securities, with a preponderance for high-grade papers.
Singapore is regarded as an important centre for repo trading
of US Treasuries and US dollar-denominated bonds issued
The Singapore dollar (SGD) market is also developed and despite
a number of participants pulling out of the cross-currency
space in the past 18 months, there is still a degree of
interest in financing paper against US dollar.
Wei-Shee Chia from ICBC Standard Bank comments: "The bulk of
the non-UST demand I see derives from a cross-currency
financing for SGD-denominated assets. The market views these
papers as high quality and the level of haircut we are able to
charge against US dollar makes it an attractive proposition for
our customers among local financial