Dividend theme deemed best defensive strategy for Singapore market

Dividend resiliency is key.

"Though Singapore remains our least preferred market in ASEAN 3, we believe the dividend theme provides the best defensive strategy in this market as long as bond yields and global growth remain low," according to the brokerage research firm Morgan Stanley's latest Asia Macro Debates report.

"Absolute spread between dividend yield and bond yield is significantly high, at 186 bps, or 83 bps higher than the past 10-year average of 103 bps. We expect dividends to continue to be more resilient than earnings as has been the case in the past 22 years," Morgan Stanley added.

"With the global macro landscape still in a 'twilight zone,' with volatile earnings growth expectation, investors would do well focusing on high and sustainable dividend paying stocks," it said further.

More From Singapore Business Review

• Flourishing food sales drive Olam International profits up 21.3%
  

• OEL IPO raised a stunning S$72m in gross proceeds
  

• Daily briefing: Father of Tampines accident victims appeals to motorists