Strong fundamentals to support markets in 2018, but investors are skittish: DBS CEO

With stock markets now in the midst of a nine-year bull run, investors will be skittish and it will not take much to trigger corrections, DBS chief executive Piyush Gupta said.
With stock markets now in the midst of a nine-year bull run, investors will be skittish and it will not take much to trigger corrections, DBS chief executive Piyush Gupta said. PHOTO: ST FILE

SINGAPORE - The fundamentals that underlie global economic growth are still strong, which will power financial markets throughout 2018, DBS chief executive Piyush Gupta said on Thursday (Jan 11).

However, with stock markets now in the midst of a nine-year bull run, investors will be skittish and it will not take much to trigger corrections, he added.

He was speaking at the DBS Private Bank market outlook for the first half of the year.

Triggers could come in the form of geopolitical events such as rising tensions in North Korea or a step up in trade rhetoric between the United States and China, Mr Gupta said.

Even likelier are triggers in the form of sociopolitical tensions - political events caused by tensions surfacing from the disenfranchised and underprivileged in society. "There is a lot of angst in the system and inequity and comparisons between the haves and have-nots will continue creating a lot of angst," he said.

Still, there are pockets of opportunities for investors this year, he said.

He is particularly bullish on China, noting that while tech valuations are high there, the tech firms are making a big difference in the economy and society, which justifies their valuations.

South-east Asia is another positive story this year, he noted, given strong consumption trends and the openness of the regional economies, which will help them ride on strong global growth.

Financial services companies stand to gain from rising interest rates, he said, while in Singapore, property firms are likely to get a boost from the ongoing market recovery.