SINGAPORE - The Singapore market continues to have its wings clipped by the tough operating environment, according to a recent report by Credit Suisse Private Banking and Wealth Management.

Head of South-east Asia Research Kum Soek Ching noted in the report last Friday that most sectors have turned up "dismal" corporate results for the first quarter.

This includes companies in the offshore and marine sector as well as domestic-oriented sectors such as media, land transport, consumer and telecommunications, which have "missed expectations".

While property developers and real estate investment trusts (Reits) delivered results that were largely in line with expectations, Ms Kum said that Reit managers are now "more cautious in view of more limited organic growth opportunities and slowing leasing demand".

"Banks were one of the very few bright spots, buoyed by strong non-interest income, although soft loans growth detracted from performance."

Ms Kum expects Singapore property stocks to offer "attractive risk-reward proposition", and that banks will be "clear beneficiaries of rising interest rates".

"Beyond that, stock selection focuses on pockets of undervaluation in the market."

The report noted that Singapore's economy grew at a modest 2.1 per cent, compared with the year before, or 1.1 per cent quarter-on-quarter.

Credit Suisse expects economic growth for the year to come in at 2.3 per cent, at the lower end of the Government's 2 to 4 per cent projection range.

This is as the manufacturing sector operates in a "contractionary mode, thanks to cyclical challenges and economic restructuring", while momentum in the services sector shows signs of slowing.

"Given the subdued macro and earnings growth outlook, market return is likely to be capped at a single-digit rate for this year," said Ms Kum. "We expect inexpensive valuations and external sector resilience to limit market downside."