Singapore is well placed to profit from economic growth across Southeast Asia, according to Meadows Financial. The Singapore-based investment manager made its case on December 23, 2017. It pointed to the city-state’s location, its ease of doing business and its rank as the seventh least corrupt country in the world.
The company’s survey found that Singapore is one of the most attractive places to invest in the Asia-Pacific region. Its balanced economy, world-class infrastructure and highly developed, well-regulated markets all count in its favor. As a result, investors can tap Southeast Asian growth while keeping governance and rules close to those of advanced Western markets.
Much of that growth story rests on ASEAN, the Association of Southeast Asian Nations. The bloc also has 10 member states and more than 600 million people, most of them under 30.
Still, Singapore was not always seen this way. After the 2008 financial crisis, some investors pulled back, since they believed its advanced economy had little room left to grow, especially with Western demand for its exports weak. The country had a brief recession in 2009. Since then it has grown every year. In 2017 it expanded strongly as the global recovery picked up.
Stocks then followed. The Straits Times Index was up nearly 20 percent in 2017 at the time of the release. Andrew Sullivan, chief operating officer of Meadows Financial, called that gain admirable but modest next to some individual stocks on the exchange. He said the firm sees much more upside ahead as growth improves.
Taxes add to the appeal. Singapore does not levy capital gains tax. Nor does it tax dividend income on shares owned or sold by non-residents, so foreign investors keep those proceeds. The company also cited heavy investment in new technology, a stable government that is retraining its workforce for future jobs and a strategic location.
Sullivan compared Singapore’s role in ASEAN to London’s role in Europe. In his view, it is the region’s main commercial and financial hub, with advanced technology, education and governance. He confirmed that Meadows Financial keeps a standing buy recommendation on the Straits Times Index. The firm also plans to keep finding and investing in key stocks and other assets in Singapore’s markets.