SINGAPORE: Compared with other markets, the Singapore market has been more subdued, with the Straits Times Index (STI) spending the last three months of 2023 range-bound between 3,050 and 3,150 points.

The STI ended last year down by 11.05 points, or 0.34%, from the end of 2022.

But insiders said that the local market was severely undervalued, trading at under 12 times forward earnings, 0.8 time book value and offering more than 4% dividend yield.

“On a price-to-earnings basis, the market is now at a 59% discount to the US’ S&P 500. This is the biggest discount ever and only touched these levels briefly in the 2020 pandemic,” Maybank Securities head of research Thilan Wickramasinghe said.

Wickramasinghe and his team reckoned companies exposed to artificial intelligence (AI), Internet of things, sustainable energy, transportation, travel, healthcare and industrial real estate will benefit.

Themes such as government-linked company restructurings, China-plus-one and near-shoring, mergers and acquisitions, and AI will be in play.

China-plus-one refers to a strategy in which companies avoid investing only in China and diversify their businesses in alternative destinations. — The Straits Times/ANN