Investors should shift money out of Singapore and into India, where the benefits of fast economic growth and asset reflation are more likely, according to ABN Amro.

The brokerage recently downgraded Singapore from neutral to underweight, saying falling real-estate prices and underperforming banks are bad signs.

'The stock market is more likely to capture the deflationary impact of current government policies than the benefit of reduced business costs,' says chief Asian strategist Eddie Wong. Exporters positioned to benefit most from the falling cost base are mostly foreign-owned and do not trade on the local exchange, he says.