ATHENS, Greece–Singapore’s government recently released its advanced estimate for second-quarter economic growth. The numbers reveal an economy much stronger than a majority of economists and many investors expected.

Based on April and May data, Singapore is estimated to have grown 8.2 percent year-over-year, significantly faster than the 6.7 percent consensus expectation. Assuming no surprises in the June data, the economy is entering the second half of the year on strong footing, and Singapore should post 6 percent to 8 percent GDP growth for 2007.

The economy should be helped by sustained growth in construction and services, particularly banking and business services.

Singapore has been an SRI favorite for more than a year; my preference has grown stronger as the economic transformation that commenced a couple years ago has begun to bear fruit. That process is changing the country’s socioeconomic targets.

Economic diversification has helped reduce Singapore’s risk of overreliance on any one particular sector. For example, the development of the biomedical segment in manufacturing has decreased the relative importance of electronics. And rig-building and ship repair (a global growth proxy) have also contributed to growth.

The financial services segment has also been booming, and I expect this trend to continue. Singapore continues to position itself as a banking, convention and entertainment hub in Asia, and it’s attracting foreign talent to its growing money management industry. Assets under management have reached USD590 billion, up from USD150 billion in 2000.

This repositioning has fueled a real estate boom, which started in the prime office and residential areas and is slowly expanding to other segments of the market. This is a very important development; income recovery is starting to happen on a broader scale, which will help the economy sustain its expansion longer term. Recent statistics show that residential property values have increased 13.8 percent year-over-year. (See SRI, 4 October 2006, Portfolio Shuffle and 11 October 2006, Testing…Testing.)

Although Singapore’s economy would be adversely affected by a slowdown in the global economy, it remains a market well worth your investment money. Singapore Telecom, United Overseas Bank and Keppel Corporation offer good exposure to Singapore’s, as well as Asia’s, economic future.

The Singaporean market has been very strong, and it remains one of the best performers this year. It can be found in the middle of the Fresh Money Buys pack because it offers less value than before. But this is a multiyear investment story that will take time to unfold in its entirety.

Malaysia is another economy that’s finally trying to change and catch up with the realities of the new global economic order. Investors are beginning to appreciate the effort, and the local market has also performed well this year.

A low and declining inflation rate has driven the market rally, and increased liquidity in the system has been helped by the strength of the local currency, the ringgit. Malaysian companies have been, along with most companies in the region, deleveraging and repairing their respective balance sheets since the Asian financial crisis of 1997-98.

Domestic institutional investors are coming back to the market, and have been buying on every weakness. It will be difficult for the big money to ignore the Malaysian market’s potential, especially if economic and political changes continue as planned. Expect the market to perform well the rest of the year and once again surprise (most investors) to the upside. Malaysia remains a buy.

Fresh Money Buys

If you’d like to add to your positions in Portfolio recommendations or allocate new funds, focus on the following markets, in order (for both countries and sectors): South Korea (banking), Hong Kong (real estate, publishing, infrastructure), India (pharmaceutical, banking), Malaysia (ETF), Russia (telecommunications, energy), Taiwan (technology, telecommunications), Singapore (telecommunications, banking, industrial), Europe (oil, pharmaceuticals, industrials, communications equipment, media), Japan (industrials, banking), China (consumer, coal, power, oil, water) and Macau.

Brokers

Many readers have requested information on brokers that can better execute orders for SRI recommendations. A firm that offers access to overseas markets will help you take better advantage of the Portfolio.

Interactive Brokers provides an excellent service and can easily execute a trade for you overseas, as can Delta Global Advisors.

Mainstream broker E*Trade now handles some international trading online. Commissions are slightly higher, but the Web site is particularly easy to use and includes solid news and quote feeds for most foreign markets.

The company became the first US discount brokerage to let customers’ trade foreign-listed stocks online when it rolled out a pilot test of its global trading platform for 1,000 accountholders. Those customers are now able to buy, and sell stocks listed on major international markets. The rollout is expected to take two months before all customers have access.

Others will probably have to follow suit, and soon. Interest for direct access to Europe and Asia has prompted the change. Customers will also be able to buy and sell euros, pounds, yen and Hong Kong dollars. The platform could eventually support access to 42 more countries and related currencies.

According to a recent Wall Street Journal article, Fidelity has seen a fourfold increase in customer requests for international stock purchases. As a result, it’s beefed up its customer service staff to handle the transactions. You can buy foreign stocks through Fidelity by calling the broker directly.