Singapore’s largest bank DBS outlines 12 trade ideas for 2021 – CNBC

SINGAPORE — Asia is set to outperform the rest of the world as economies in the region look to rebound in 2021 from the coronavirus-induced slump, said the chief economist of Singapore’s largest bank.

Few Asian countries will continue to receive large fiscal support next year, but that’s “OK” because the region is in “a far better state” in terms of managing the pandemic and growth recovery compared to the West, said Taimur Baig of DBS Group Research.

DBS Group Holdings in the central business district of Singapore.

Nicky Loh | Bloomberg | Getty Images

“I think it’s a fairly easy set of arguments to be made that given the favorable growth differential, given attractive valuation, Asian economies and markets will attract investor interests — they will do better,” he told CNBC’s “Street Signs Asia” on Wednesday.

“Therefore, we are actually making a fairly strong outperformance call for Asian asset classes and Asian economies in 2021 relative to the rest of the world,” he added.

In a report last week, Baig and other DBS strategists outlined 12 trade ideas and strategies for 2021 in rates, currencies and credit.

Interest rates

Rates trading has a macroeconomic focus and usually revolves around sovereign bonds and interest rate derivatives. The DBS report listed six trading themes for rates:

  • Steepening of the U.S. Treasury yield curve, with interest rate on the 10-year tenor likely to hit 1.3% in the latter part of 2021 — up