Wong sees it this way: this $5 billion has helped move the market, but the impetus is not from this pool of funds alone. There are both push and pull factors, including Singapore’s perceived attractiveness relative to the US, Hong Kong and China, he says.
Firstly, the US factor. For years, the US market, with the world’s deepest pool of liquidity, has demonstrated what commentators have called “exceptionalism”. The current “super bull run”, which began with the much-awed Magnificent 7 tech stocks, has extended into this year, driven by fervour over artificial intelligence and the broader technology ecosystem. Besides chasing up valuations of companies like Nvidia Corp, investors are eager for a piece of companies that can articulate an AI use case, presumably so they can become more efficient and profitable.
As a result, the S&P 500, the key US index, is trading at a trailing P/E of around 30 times, which is already about two standard deviations from its mean and therefore considered somewhat “overstretched”. Wong acknowledges that even when markets are deemed overstretched, they can still move higher. However, a large part of this expectation is that earnings will come in later to support the valuations. “What if earnings disappoint?” he asks.
Thus, Wong warns that investors should be cautious, as the moves may not be accompanied by robust fundamentals. Wong points out that the US economy is increasingly struggling to manage its debt, as evidenced by more frequent and more extended government shutdowns when debt ceilings are reached and politicians decline to compromise. China was once the largest holder of US government debt, but amid the trade war, it has been steadily offloading US Treasury bills. “If your external source of funding is compromised, you will have issues,” he says.
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Granted, the US government can print more money, but it is also aware that doing so will put further downward pressure on the dollar. If this trend persists, the “long-term tragedy” could occur, with obvious repercussions for the global economy, not just within the US. “It has not burst now, but it does not mean it will not in the future,” says Wong, who feels that not enough market commentators are willing to stick their necks out to call this out.
Wong agrees that, despite the US government’s debt strain, the country’s private corporations, especially the tech giants, are still raking in record earnings, even as they remain adept at reducing the tax they pay — a sore point for some left-leaning US politicians. “They have been able to exist in a parallel way for the longest time,” he says.
Still, Wong, citing the debt ceiling and the alignment of other economic factors, such as the trade war and unemployment, has reservations about how much further the stock markets can go. He observes that central banks, starting from the European Central Bank, have already recognised the need to lower rates and they have taken action. The Federal Reserve has done so as well, but not as quickly as President Donald Trump wants.
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Besides keeping unemployment down, another key reason for cutting rates is to hold inflation closer to the 2% long-term target. However, there is a growing view that markets and economies need to adjust to a higher inflation rate of 3% or more, due to persistent global economic stress and geopolitical tensions. This was a point made by activist investor Bill Ackman at a recent forum in Singapore.
In a more recent and surprising development, the US Department of Justice has opened probes into the Fed. This is viewed as a thinly disguised bid by Trump to increase his pressure on US Federal Reserve chairman Jerome Powell to do his bidding. With the Fed’s independence under siege, some US-based commentators are suggesting that investors might want to increase their exposure beyond their home market.
Over at another major economic centre, China and Hong Kong’s markets have been on a bullish run in recent months, following a multi-year slump caused first by policies targeting the property and technology sectors and then further exacerbated by the pandemic. Before the current buoyant phase, there had been a series of starts and stops when the euphoria of a recovery quickly gave way to disappointment. The “erratic” moves in the markets have made more investors wary, says Wong. China’s technology sector has already jumped on the AI bandwagon, reviving interest in tech stocks in this phase, but the key property sector, which absorbs large chunks of balance sheets, remains in a rut.
‘Big stir’
In contrast, Singapore enjoys key advantages that will translate into a stronger market performance. First, the ongoing growth story of Asia. Today, this region contributes nearly half of the global GDP. By 2030, this proportion is expected to reach almost 60%, driven by various major and emerging economies. Wong notes that China remains in a trade war with the US, but its size and influence relative to other countries remain considerable. Many countries are also well underway in their industrialisation and digitalisation journeys. One result of this GDP growth is that the middle class will grow strongly, both in size and income. “If you want to grow your business, you have to be in Asia,” says Wong.
The woes elsewhere — conflicts, inflation and political unrest — have further contrasted Singapore as a stable and sound place to do business and park money. “All these negative adversities will be bad for the world but good for Singapore,” says Wong.
As an indication, the Singdollar, increasingly seen as a safe-haven currency, has appreciated by about 6% in 2025 against the US dollar — the largest gain in the last 20 years. Another indication, according to Wong, is the growing number of family offices that have set up here to manage wealth and also do business.
With the financial services sector leading the way, Singapore has become a more significant business and economic hub, offering a sound and convenient gateway for the movement and trade of goods and services.
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With these macro conditions as a base, the “intervention” by MAS to revive the market has resulted in a “big stir”, setting off the Straits Times Index (STI) to consecutive new highs, says Wong. The $5 billion EQDP should be interpreted not as a one-time stimulus but as a multi-year positioning effort. “It is more like telling us, ‘Hey guys, we have enough of a lull market over the last 20 years, and now we are serious.’ This is going to be a structural change,” he says.
Towards US$1 trillion
When DBS Group Research famously suggested last September that the STI could hit 10,000 points by 2040, there was some initial scepticism. However, after doing their own maths, more market analysts are no longer laughing this off.
Wong, for one, notes that if dividends were included, the STI returned 6.6% per year over the last 20 years. By applying a discount of say 20%, that’s 5.5%, and if this compounded rate is applied over the next ten years, that will hit 10,000 points. Gains of such magnitudes are not impossible. Wong points out that STI was in the hundreds, as were the US indices. He is optimistic that Singapore’s market cap, currently around US$800 billion ($1.03 trillion), could be the first in Southeast Asia to reach US$1 trillion and join the ranks of other East Asian economies.
However, given the nature of markets and economies, the march toward this mark will not be one-directional. There will be plenty of external shocks along the way, and investors must have the stomach to ride them out, even when facing unsystematic risks that cannot be hedged.
Wong observes, too, that rather than a Big Black Swan, there are now numerous more mini Black Swans along the way, such as the Liberation Day tariffs last April, which sent markets down by 20% before a quick rebound. Market cycles are no longer seven or 10 years. “I’m talking about a manageable and controllable crisis,” he says.
Meanwhile, Wong stresses that there is one key ingredient—earnings, not merely growth expectations. “If you don’t have earnings, you are not part of the system already.” For Singapore, as long as earnings growth does not deteriorate much, the market will find sufficient rational reasons to keep it moving — it has a solid base to build on, according to Wong.
Waking up
Sure, Singapore companies will not report rapid earnings growth as there is no mega tech company here that can be mentioned in the same breath as those in the US and China. The companies listed here form what is best characterised as a value-based market. By their nature, these counters are low beta. “They don’t do a lot of fanciful innovation. What they do, what they produce more of, is old, traditional, recurring business. Yes, they don’t surprise the market, but you can sleep peacefully over the weekend,” says Wong.
These companies also do not excite hard-charging investors, yet given that stocks here have, for years, underperformed — and remain undervalued — this is another reason for Wong’s optimism. “It is human nature to want to make the most money, and you look for the most favourable conditions, the most attractive playground. You don’t have many choices. If you look for laggards, one of which is Singapore,” he says.
After all, Singapore has long been described as a value-based economy, and, if anything, the big companies here are known for the predictability of their earnings and stronger-than-ever cash balances. “Besides, earnings, cash is what matters. The only place where you can find the coexistence of strong, sustainable earnings and strong cash balances is a value-based economy. On this basis, you will not say Singapore is boring, but a market that is waking up and getting interesting,” says Wong.
