(Bloomberg) -- Singapore could be the biggest comeback story for Asian equities this year.

After becoming the region’s worst performer in 2020 following a 12% slump, the Straits Times Index has surged 9.3% to trounce all other major Asian benchmarks so far this year. That’s come in the wake of a rout in high-flying growth stocks that saw the tech-heavy Nasdaq 100 enter a correction amid rising U.S. Treasury yields.

Singapore’s market revival echoes the global trend of investors embracing value shares, betting on an economic rebound and dumping expensive growth stocks. The island nation’s market is dominated by old economy shares, with more than 80% of the index made up of cyclical stocks sans technology and communication services -- among the highest contributions in Asia.

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“Singapore stocks look attractive because of their relatively better valuations and high dividend yields,” said Stuart Rumble, a multi asset investment director at Fidelity International. “The market’s large share of real estate companies and banks also make it highly geared to a re-opening of the local economy,” he added.

The Straits Times Index is trading at 14.7 times 12-month forward earnings, behind most of its regional peers and the MSCI Asia Pacific Index’s 16.6 multiple, according to Bloomberg-compiled data. The Singapore gauge’s dividend yield is estimated at 3.76% for the next 12 months, higher than the regional benchmark’s 2.25%.

The export-oriented economy suffered its biggest contraction since independence last year due to the global pandemic. While the country is still phasing out restrictions on movement, new daily Covid-19 infections locally are hovering near zero and the government expects growth to rebound to between 4% and 6% in 2021.

The three local banks -- DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. -- that make up nearly half of the index’s weight, contributed the most to the benchmark index’s rise amid higher yields, climbing more than 10% each this year. While known for their dividend yields, investors are awaiting the easing of a regulatory cap on payouts introduced last year.

Stocks linked to Jardine Matheson Holdings Ltd., Singapore’s biggest conglomerate by market value, are also among the top performers on the index in 2021 following double-digit price gains on Monday, after the company said it will untangle its decades-old structure.

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