Current valuation of STI attractive at below historical P/B mean of 1.62x, presents buying opportunity as Europe’s debt crisis not expected to result in double-dip recession for Singapore, says Citigroup, according to Dow Jones.

Citi notes past debt crisis involving Mexico, Russia, Argentina had negative effect on Singapore market but impact on Singapore economy limited: “The STI rallied strongly and swiftly at the end of past debt crisis, especially once the crisis currency had depreciated significantly.”

The reserach house says while EUR may weaken further, this will help revive Europe’s competitiveness. Adds, central bank MAS’ strong SGD policy, country’s strong fiscal position set Singapore apart at time of escalating currency, fiscal risks globally. Keeps year-end STI target at 3,250.