Key highlights:
Straits Times Index climbed more than 12.2% in the first quarter of this year
STI was the worst performer of 2020 in Asia, ended the year after losing 11.8%
TAIEX the best performer in Asia with a 12.4% gain this year
Singapore, Asia’s worst performer of the year 2020 is now one of the top performers in the region. The Straits Times index or STI comprises the stocks of the 30 representative companies listed on the Singapore Stock Exchange. Last year, STI became the slowest performing entity, after losing 11.8%.
But now STI has climbed up to the top. The first quarter of the financial year 2021 has ended and the STI has gained 12.2%, making it one of the top performers of Asia. As many as 12 of its constituent stocks have made double-digit gains this year.
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More gains expected
As the global economies recover from the downfall of the pandemic, Singapore expects a rise soon. A high proportion of companies of the county’s STI are financial and industrial stocks, typically considered as cyclical. These types of stocks rise and fall in concurrence to the fluctuation of the economy.
The fact that the stocks of the STI companies are the cheapest in the region also plays an important role in dictating the country’s economic future. The listed companies are also looking forward to opportunities for mergers and acquisition activities.
Taiwan: The growth economy
Taiwan is has proved to be the best-performing economy of the first quarter of 2021 in Asia. Taiwan Capitalization Weighted Stock Index or TAIEX is the stock market of companies traded on the Taiwan Stock Exchange, edged out the Singapore index with a 12.4% gain this year.
Unlike Singapore, Taiwan’s stock market has a high proportion of growth companies. Growth stocks have the potential to grow quickly and are usually from the technology sector. In 2020, these growth stocks were in favour, but now as the economies are recovering cyclical stocks are interesting the investors more.
Taiwan was Asia’s best-performing economy in the year 2020, majorly due to the high semiconductor demands. The Taiwan Semiconductor Manufacturing Co. is the world’s largest foundry, exports were boosted due to the surge, resulting in economic growth.
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