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'Time to catch up': Morgan Stanley projects 16% returns for Singapore stocks in 2021

People wearing protective masks walk along the Jubilee Bridge at the Marina Bay waterfront on June 7, 2020 in Singapore.
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SINGAPORE — Singapore stocks have been among the worst performers in Asia-Pacific this year, but Morgan Stanley says there may be "time to catch up" in 2021.

The MSCI Singapore Index is forecast to climb by more than 10% between this month and the end of next year — yielding around 16% in total returns including dividends, the investment bank said in its Singapore equity strategy outlook report on Tuesday.

That performance will be driven by three factors: optimism around an economic recovery, growing tech presence in the city-state, as well as a potential rise in participation from both retail and institutional investors, Morgan Stanley analysts said in the report.

"We see 2020 under-performers catching up in 2021 as the market factors in a return to normalcy," they said. The analysts picked five Singapore-listed stocks with the best prospects next year.