The search for yield has turned many investors’ attention to emerging Asia, with China, India and Indonesia often featured as preferred investment picks. But Amundi Asset Management has thrown a surprising name into the hat: Singapore.

Equities in the Southeast Asian city-state have outperformed many of their regional peers in the first half of 2017, said Chan Hock Fai, director for investment at Amundi.

So far this year, Singapore’s benchmark index, the Straits Times Index (STI), has climbed around 13 percent. That beat the 10 percent gain in Indonesia’s Jakarta Composite Index and the 2 percent increase in the Shanghai Composite Index, although it lagged the 15 percent rise in India’s Sensex.

Chan pointed to Singapore equity yields coming in between 3 and 3.5 percent as driving gains.

The country’s political stability and strong fiscal position add to the attractiveness of its equity market, where valuations are currently cheap, Chan told CNBC in an interview.

“Singapore is actually a high yield market. If you look at the general (equity) market, we’re more than 3 percent yield, between 3 and 3.5 percent — that’s very attractive for investors these days in a yield hungry market, when fixed incomes are yielding so low,” he said.

The Singapore 10-year government bond yield was around 2.07 percent, while the U.S. 10-year Treasury yield was around 2.27 percent on Thursday.

In a note earlier this week, the Singapore Exchange (SGX) said the STI’s dividend yield was 3.3 percent as of June 27, 2017. That was higher than the 2.8 percent average of Indonesia, Thailand and Malaysia, and the 2.5 percent average of Japan and Hong Kong markets.

That was a turnaround for an exchange that struggled with investor confidence and thin trading volume after a penny stock rout, a spate of delistings and few initial public offerings (IPO). SGX has stepped up to inject some much-needed vitality into the market, including pursuing the listings of tech companies and studying the possibility of dual-class shares.

Those efforts are paying off. This year, the exchange has seen nine new stock listings and is tipped by consultancy EY to lead the IPO pipeline for Southeast Asia in the second half of 2017.

The $2 billion listing of Singtel’s broadband subsidiary NetLink Trust next month, set to be the largest IPO this year, is among corporate actions on the SGX that could drive further market upside for Singapore, Credit Suisse wrote in a report earlier this month.

The bank estimated that close to 79 percent of MSCI Singapore could be involved in corporate activities such as asset divestment, listings of business units or consolidation of holdings. Its preferred stocks include Singtel, DBS, UOL and Sembcorp Marine.

“In our view, bottom-up drivers could lead to a further improvement in ROE (return on equity) for MSCI Singapore to close to 9 percent from 8.5 percent currently, while dividend yield could be increased from 3.7 percent to 4.5 percent,” according to the report.

Chan agreed that there is a good chance the Singapore equity market could retain its current high yields in the next two quarters. Barring shocks, the export-oriented Singapore will benefit more from the global recovery given its high trade to gross domestic product ratio, he said.

An official forecast projected the city-state’s economic growth at between 1 and 3 percent this year, but the government has said that the economy is likely to expand faster than in 2016, when it grew 2 percent.

“Singapore has always been part of the emerging Asia story. Now that we’re seeing a synchronized recovery globally, and Singapore being highly leveraged to global exports, it would be the chief beneficiary of this growth,” said Chan, who picked property developers and banks as his choice investments.