(FORTUNE Magazine) – One after another, foreign economies are slowing down. But not Singapore's. This tiny country, only one-fifth the size of Rhode Island, is in full swing. Bolstered by a solid middle class, low inflation, political stability, and an enviable work force for foreign corporations, the Singaporean economy should leap 7.5% this year. Singapore's stock market is bounding ahead too. After slipping on war worries in the second half of 1990, the market has recovered nicely, up 27% so far this year. Analysts say there's a strong move under way. Singapore's economy will get a second wind as the U.S., its largest trading partner, climbs out of recession. The country's industrial companies are ready for the new business. Backed by a national savings rate of 45%, vs. 4% in the U.S., they suffer no shortage of funds in their move to expand. Among the most promising industries are manufacturing, shipbuilding, and financial services. Overall, corporate profits are expected to climb at least 10% to 15% this year and next. Says Andrew Economos, portfolio manager of Scudder New Asia fund: ''This is the premier tiger.'' Because Singapore's stock market is thinly traded, investors who venture in alone are advised to stick to the biggest capitalization stocks, like Singapore Airlines, which ranks as the most profitable airline in the world. Analysts are also recommending Keppel, a sprawling conglomerate with businesses ranging from ship repair to real estate. The quickest way to build a diversified portfolio of Singaporean stocks is to buy Singapore Fund, a closed-end fund that trades on the New York Exchange. Since the fund was recently trading at a 16% discount to net asset value, experts find it particularly appealing. Michael Porter, Smith Barney's closed- end country fund analyst, notes that Singapore Fund is especially cheap compared with other Asian country funds, which average a 2% discount to net asset value.

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