In a region gripped by market jitters and economic headwinds, Singapore is quietly cementing its reputation as a relative safe harbour in ASEAN, according to CGS International’s latest strategy note.

The city state outpaces Malaysia in terms of earnings potential, currency stability, political calm, and dividend appeal – offering a more predictable port in a stormy regional sea.

CGS International ranks Singapore favourably for maintaining a modest but steady growth trajectory, particularly in sectors like capital goods and internet services.

While markets across Southeast Asia face sharp declines, Singapore’s earnings per share (EPS) for 2025 are forecast to grow by 1% to 2%, offering a welcome shade of green in an otherwise red-tinged landscape.

That said, it’s not all smooth sailing. The banking sector – which contributes to half of the MSCI Singapore Index’s earnings – is on the watchlist.

Analysts Lock Mun Yee and Lim Siew Khee sounded a cautious note:

We believe weaker macro economic conditions suggest that Singapore banks … may see potential earnings cuts.

If loan growth dries up to levels reminiscent of the global financial crisis and wealth management fees shrink by 20% year-on-year, a 6% to 7% downward revision in FY25 EPS may be on the cards.

Still, the analysts are not ringing alarm bells just yet. “We could still see market growth of c.1–2% backed by capital goods and Internet services,” they added, suggesting that other engines of the economy could pick up the slack.

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Undervalued gems in plain sight

Singapore’s market fundamentals are painting an attractive picture for investors. With the market trading at 12.27 times 2025 forward earnings, a dividend yield of 5.1%, and return on equity standing at 12.1%, value investors may find fertile ground.

The Straits Times Index, while down 10.4% year-to-date, still fares better than regional peers.

Thailand and Indonesia have seen their benchmark indices plummet 19.1% and 16.7% respectively, reinforcing Singapore’s role as the relative outperformer in an otherwise subdued ASEAN.

Opportunities for rebound plays are also gaining attention. Several Singapore-listed stocks are now trading at or below their historical valuation troughs, catching the eye of value hunters.

Winds of uncertainty still blow

Despite the relative calm, storm clouds linger on the horizon. Singapore’s government is reviewing its 2025 GDP growth target of 1–3%, acknowledging that global economic uncertainties could reshape expectations.

CGSI notes that while investors are cautiously optimistic, there remains a lingering concern that policymakers – across the region – may not be fully in the driver’s seat.

“Markets are not convinced that the governments have full control of what lies ahead,” the report stated, tempering expectations.

However, any economic downturn may arrive more as a drizzle than a deluge. As CGSI put it, a potential recession “may not be a real shock if it comes.”

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The bottom line for HR and business leaders

For HR and business leaders navigating ASEAN markets, Singapore offers a rare mix of resilience, value, and strategic calm. But the devil, as always, is in the details.

While the overall outlook remains modestly positive, sector-specific risks – especially in banking – require watchful eyes and agile planning.

For HR heads, the signals are clear: stable economic conditions in Singapore may support hiring plans and talent retention, particularly in high-growth sectors such as internet services.

Meanwhile, for CFOs and business strategists, undervalued assets and steady dividend yields may present timely opportunities to realign portfolios.

In a region where many are bracing for impact, Singapore might just be the steady ship riding out the storm – powered not by exuberance, but by quiet, calculated strength.