Singapore’s economy will not boom over the next few years due to the global economic slowdown, but it will not go bust either. That’s according to Swiss economist Marc Faber, who’s also known as Dr. Doom after he accurately predicted earlier stock market crashes and other financial disasters.
He was speaking at OCBC’s Global Treasury Regional Economic and Business Forum on Friday.
Marc Faber thinks that “among all the disasters in the world, Singapore is one of the smallest disasters.”
He believes the Singapore economy will survive the current economic turmoil, but is not ruling out turbulence ahead.
He said: “Singapore will just do fine but it doesn’t mean that property prices can’t go down 20 per cent or more or the share market goes down further.”
This is because the country’s open economy exposes it to fluctuations in the global market.
But he is quick to add that keeping funds in Singapore is one of the better alternatives.
“I own some REITs in Singapore because they have a high yield but I don’t think they’ll go up anytime soon. I think they’ll still go down but at least I get dividend yield of at least five per cent and the likelihood they will cut the yield is not very high,” he added.
For now, he’s hesitant to invest directly in Singapore properties.
Faber also holds Singapore dollars and owns shares in counters like OCBC, UOB and Singapore Airlines.
And while he doesn’t expect the shares to go up, he feels Singapore stocks are unlikely to plunge very much further.
He also expects the STI to settle within the range of 2000, to 2500 points.
This year, Singapore’s economy is expected to grow at the lower end of the government’s four to five per cent range. That compares to a 7.7 per cent clip in 2007.
Source : Channel NewsAsia – 12 Sep 2008