DBS, CapitaLand and more: Singapore's long-term wealth creation set to boost local stocks, says Morgan Stanley
[SINGAPORE] As Singapore reaches its 60th birthday, Morgan Stanley said the city-state is 'primed for wealth creation'.
That could unlock real gains for investors, the investment bank said in a report released on Tuesday (Jun 24).
Tapping its global leadership as a data, energy, finance and transport hub, combined with rapid adoption of emerging technologies, Singapore is set to build upon its extraordinary economic success, the bank said.
'The next step forward, we believe, will be wealth creation – building upon Singapore's established brand and economic success to further grow the country's capital and global financial standing,' it said.
'In our view, Singapore needs to pursue broad-scale wealth creation to keep its ageing population both happy and healthy – and in doing so could unlock real gains for investors,' Morgan Stanley added.
It forecast a five-year GDP compound annual growth rate (CAGR) of 3 per cent – the highest among developed economies – and expects household net assets to nearly double to US$4 trillion by 2030.
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The bank also predicts that stock market capitalisation will double by 2030.
Morgan Stanley identifies three key pillars set to underpin Singapore's wealth creation.
Hub industries
Singapore's hub industries – spanning energy, finance, transport and increasingly data infrastructure – now contribute about 63 per cent of gross domestic product.
The city-state is already a major centre for global energy and metals trade, handling around 20 per cent of total trade and hosting over 400 international trading firms, Morgan Stanley noted.
In finance, Singapore remains a critical hub for Asian foreign exchange trading, insurance and asset management.
Tourism is also being scaled up under the Singapore Tourism Board's 2040 roadmap, which aims to raise tourism receipts to S$50 billion.
Crucially, Singapore is now emerging as a regional data and artificial intelligence (AI) inference hub, Morgan Stanley said. Asia is expected to host over one-third of global data centre capacity by 2027, and Singapore is among a few key markets – alongside Malaysia and Japan – set to get 'disproportionate' investments from hyperscalers such as AWS, Microsoft and GDS.
Early adoption of new technologies
Singapore has made rapid strides in AI, with over 1,000 startups, 150 research and development teams and more than 80 active academic AI faculties, the investment bank said.
It ranks among the top 10 global AI markets and is now positioning itself as a regional AI inference hub.
Autonomous vehicles (AVs) are another area of national focus. Singapore rolled out provisional AV standards as early as 2019 and has approved 13 AVs for public road trials. Key commercial use cases are likely to emerge in logistics, mobility and municipal services.
Robotics adoption is also accelerating, especially in the form of humanoids deployed in airports and transport nodes.
To support these energy-intensive technologies, Singapore is also investing heavily in future-proofing its power infrastructure, said the bank. Plans are underway to add 3 gigawatt (GW) of green hydrogen and gas-fired capacity by 2030, with a further pipeline of more than 7 GW of renewables, including potential nuclear generation, in the longer term.
Equity market reforms
Singapore's equity market – long seen by global investors as 'small, safe and boring' – is on the cusp of a transformation, said Morgan Stanley. With a limited supply of new economy listings and low trading liquidity, the market has often been overlooked, despite its solid fundamentals and stable institutional base.
But this perception could be about to shift dramatically, said the bank. In 2025, Singapore channelled billions in national reserves and third-party funds into the domestic market, and explored a 'value-up' programme modelled after successful initiatives in Japan and South Korea.
'We believe this could ignite significant interest and confidence in the Singapore stock market globally and potentially underpin a multiyear re-rating in valuation multiples,' it added.
Below are some stocks that Morgan Stanley earmarked as potential beneficiaries.
Large cap opportunities
Sembcorp Industries
The utilities group is set to benefit from Singapore's growth ambitions in carbon trading and solutions for industrial customers, as well as increased electricity generation needs.
The company is already one of the highest returns on equity utilities in Asia (18 per cent) and is forecast to maintain that position as it continues to grow.
DBS
The bank is set to benefit from Singapore's deepening push towards higher return on equity wealth business, where it is already the third-largest player in Asia-Pacific after UBS and HSBC.
With a broader pivot towards higher value-add and higher-return wholesale banking services, the group is forecast to maintain a robust return on tangible equity of 18 per cent.
CapitaLand Investment
The largest real estate investment trust (Reit) manager in Asia – by assets under management (AUM) – stands to benefit from Singapore continuing to develop as a regional Reit hub.
It plans to scale AUM to S$200 billion by 2028.
CapitaLand Ascendas Reit
Singapore's largest new economy Reit is poised to ride the wave of Singapore's continued rise as a regional Reit hub.
Morgan Stanley Research highlights a longer-term data centre opportunity worth over S$1 billion, which could catalyse further upside from the Reit's current 6 per cent yield.
Singapore Exchange
The bourse operator is likely to emerge as a key beneficiary of ongoing equity market reforms and rising volumes in FX and energy trading.
Morgan Stanley expects FY2026-2027 net profit to come in 5 to 7 per cent ahead of consensus, raising its bull-case price-to-earnings multiple to 30 times, from 26 times previously.
Genting Singapore
The company offers steady earnings and dividend visibility amid a rebound in visitor arrivals and new attractions. The stock trades at compelling valuations, with yields at over 5 per cent.
Technology-driven growth opportunities
Singapore's early move into emerging technologies is opening up new opportunities for investors, with several listed names set to ride the Republic's push into AI, automation and the digital economy.
Grab
Grab remains the market leader in Singapore's on-demand services space, generating more than 20 per cent of group revenue – and a substantial portion of earnings before interest, taxes, depreciation and amortisation (Ebitda) – from its home market.
According to Oxford Economics, Grab contributed 0.8 per cent of Singapore's gross domestic product in 2023. Its newly launched AI Centre of Excellence is expected to accelerate the group's foray into autonomous vehicles and intelligent logistics solutions.
Sea
The Singapore-headquartered tech giant is intensifying investments in AI, fintech and local talent. Its new fintech headquarters, which will house an AI research centre, is expected to support long-term growth.
Morgan Stanley Research projects revenue and Ebitda CAGR of over 20 per cent and 40 per cent, respectively, from 2024 to 2027.
Singtel
The telco is currently building Nvidia's accelerated AI factories across South-east Asia and has a partnership with Bridge Alliance.
Despite these efforts, Morgan Stanley Research notes that the market has yet to assign meaningful value to Singtel's AI initiatives.
Keppel Corp and Sembcorp Industries
Both companies are seen as beneficiaries of increased electricity and gas demand, driven by growth in Singapore's core hub sectors.
Keppel, in particular, is targeting S$200 billion in AUM as it aligns with global megatrends including the energy transition and sustainable infrastructure development.
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