Why Singapore must champion ASEAN asset managementBY SIMON HOPKINS
The institutional investment world is waking up to the reality of the Global Financial Crisis (or GFC) which drags on interminably. We look to our newspapers on a daily basis to see if some quick fix or short term panacea for Europe’s travails has been miraculously discovered, or whether the US economy has rediscovered its mojo. The reality is that the problems in the Western World of huge fiscal deficits and ballooning public debt will persist for the rest of the financial careers of most readers. But, while Europe and North America languish, all is not lost. Institutions are now waking up to the fact that with 50% of global GDP now coming from the developing world, there is a real imperative to shift more of their investment portfolios towards these markets. Goldman Sachs estimates that this could represent as much as 4 trillion US dollars over the next two decades.
Hello Singapore! With a private banking business said to oversee over 300 billion dollars of wealth, situated slap bang in the middle of one of the most populous and fast growing regions in the world, one would have thought that the choice of funds investing into ASEAN story would be too many to list here. Instead, there are scarcely a handful of managers that run equity funds dedicated to the wider region, and those that do, whether within the big banks, or small boutique fund managers, remain small and largely unheard of, in an industry dominated by Global Emerging Markets managers.
China is only 5 hours away from Singapore, and its stock markets have not been a very fertile place to invest in recent years. However, the Philippines, Thailand and Indonesia, scarcely a short hop from the Lion City, have been the darlings of the global investor. Time to raise the flag here in the region’s principal capital market, and build a financial centre for ASEAN fund management. Step forward champions of ASEAN.