South-east Asia best market for growth, investment: Poll

A fibre-optic cable factory in China's Jiangsu province. Head honchos in Singapore rank South-east Asia ahead of China for growth and investment opportunities, with US-China trade tensions their main concern.
A fibre-optic cable factory in China's Jiangsu province. Head honchos in Singapore rank South-east Asia ahead of China for growth and investment opportunities, with US-China trade tensions their main concern.PHOTO: AGENCE FRANCE-PRESSE

BT-Citibank Outlook Survey also finds that most top executives in Singapore list US-China trade tensions as top market concern, followed by rising interest rates and slowing global growth

Top executives in Singapore say South-east Asia heads the list of markets for growth and investment opportunities, with China coming in a distant second.

A poll of 104 head honchos here found that about 53 per cent of them ranked South-east Asia ahead of China (23 per cent).

The majority of respondents indicated that trade tensions between the United States and China were the top market concern and challenge, followed by rising interest rates and slowing global growth.

The findings came in the third annual survey commissioned by Citibank.

The BT-Citibank Outlook Survey polled top managers, including those holding the position of chairman, chief executive and managing director. Most were aged 40 and over. The research was conducted online by Singapore Press Holdings in November.

About 86.5 per cent of respondents placed US-China trade tensions as the top geopolitical challenge this year while about 6 per cent considered it to be Brexit.

As for global political stability and the international trade situation, most believed that things would worsen in the first six months of this year.

Ms Chan San-San, head of wealth management and segments at Citibank Singapore, said political risks will continue to linger this year as trade tensions, European political uncertainties and Brexit discussions continue, even as economic fundamentals appear strong.

About half of the survey respondents felt that the consumption trend and employment market here would remain unchanged in the first half of this year.

The majority of respondents also expected the investment environment to be "fairly or very volatile" this year. About 33 per cent believed a recession was unlikely while 43.3 per cent were neutral.

The key asset classes the respondents would be interested to invest in were equities, real estate and bonds, followed by private equities, liquid alternatives and hedge funds.

Citi's analysts forecast that the nine-year bull market is not finished and they expect single-digit percentage gains by the end of this year.

"Within equities, we prefer emerging markets, particularly Asia, and Europe ex UK. We also believe that technology, materials and healthcare stocks provide good opportunities in 2019.

"This is also echoed by the survey respondents, with artificial intelligence, fintech and health being cited as hot business sectors for this year," said Ms Chan.

The survey indicated that the key investment themes likely to dominate this year included emerging markets (55.8 per cent), Internet of Things (53.8 per cent) and robotics (49 per cent).

An overwhelming majority of respondents said their readiness to invest would be affected by factors such as the employment market, consumption trend, global political stability and international trade situation.

Only a low 15 per cent of respondents claimed that their readiness to invest was unaffected because they took a long-term view when investing, and their investments were well diversified.

On a positive note, most have worked out their wealth and financial goals in the past year, with the majority planning to grow their wealth.

About half used a combination of talking to a relationship manager and online advisory tools to track their goals.

Financial experts continue to strongly advocate and encourage financial goal setting as one of the key pillars in a wealth planning journey.

Ms Chan said she was encouraged to see that 72 per cent of survey respondents had worked out their wealth and financial goals in the past year.

"Financial goal setting remains a key pillar in one's wealth planning journey and it is increasingly convenient to do so, thanks to digital tools at our disposal today.

"Our clients can leverage Citigold's Total Wealth Advisor to set wealth goals with their relationship managers, monitor and manage their portfolio all in one place," she added.

She advised that, in such times of volatility, a well-diversified, high-quality portfolio would be able to provide a buffer for investors.

"At Citigold, we work closely with our clients in building stronger portfolios to overcome turbulent times, by investing in more resilient assets and by employing strategies that focus on growing long-term wealth at the appropriate risk levels, using our in-house risk management tools such as the Citigold Diversification Index to help our clients," she said.

Investors are encouraged to seek advice more frequently in view of the volatility, so that they can remain nimble in this environment.

A version of this article appeared in the print edition of The Sunday Times on January 06, 2019, with the headline 'S-E Asia best market for growth, investment: Poll'. Print Edition | Subscribe