“All polls are predicting a Biden win so this is investors positioning themselves” in beaten-down shares, said Joel Ng, analyst at KGI Securities (Singapore) Pte.
See: Asian markets hoping for Biden victory as upsides appear in Singapore equities
Investor expectations of a Blue Wave have swept across global markets, with money managers betting more fiscal spending by a Biden-led administration will spur growth and spark a rally in value and cyclical shares. BlackRock Inc.’s research arm on Monday upgraded Asia ex-Japan equities to overweight from neutral on the likelihood of a Democratic sweep and better virus containment in the region than the West.
See also: Singapore overtakes Thailand to become Asia's worst stock market
In Singapore, where there are less than 100 active virus cases, more than 80% of the stock benchmark is made up of cyclical stocks excluding the tech and communication services sectors.
The index is currently trading at 14 times estimated earnings over the next year, in line with its 10-year average. In comparison, the MSCI Asia Pacific Index is trading at a multiple of 16 times, much higher than its historical average of 13 times.
