In Singapore, sectors that focus on the domestic market have failed to lift the economy, the bank said, adding it would in turn limit how much companies can grow. That’s despite the stock exchange offering attractive valuations and the third highest yield in Asia at around 4.8 percent, added HSBC.
“Growth is unexciting,” the bank’s analysts wrote. “Overall, we find other markets offer a more attractive proposition than Singapore, so we move our stance to neutral.”
The analysts were more bearish on Hong Kong. They said business conditions in the Chinese special administrative region are weighed down by “weak demand from China, slowing global growth and uncertainty around a tariff war” in the near term.
“Against this backdrop, firms continue to cut back on their purchasing and hiring activities,” HSBC said.