Singapore's Asset Management Sector Shrugs Off Late-2018 Market Drop

Tom Burroughes

19 September 2019

Singapore's asset management industry saw total assets reach S$3.4 trillion ($2.5 trillion) last year, rising by 5.4 per cent from a year earlier and bucking a global AuM decline as markets slid late in 2018, according to the .

In its 2018 Singapore Asset Management Survey, MAS said that global assets under management slipped by 4 per cent to $74 trillion, compared with an increase of 12 per cent in 2017, weighed down by uncertain global growth prospects. Global net inflows for 2018 also slowed to $944 billion, below the record high of S$2.2 trillion in 2017, reflecting investors’ cautious stance amidst the uncertain outlook.

The figures were compiled before political unrest hit rival financial hub Hong Kong. According to anecdotal evidence heard by WealthBriefingAsia, as well as by some media reports, some high net worth individuals have sought to shift money from Hong Kong to Singapore over recent months.

Singapore's cross-border business remains substantial: 75 per cent of AuM sourced from outside of Singapore in 2018 and some 67 per cent of total AuM was invested in Asia-Pacific, of which more than a third of Asia-Pacific AuM were investments into ASEAN countries.

The city-state's AuM growth was uneven across the traditional and alternative asset management sectors. Strong inflows in traditional sector strategies managed or advised from Singapore were more than offset by weaker valuations across major asset markets, in tandem with global trends. As a result, traditional AuM was sluggish and fell by 7 per cent over the year.

The alternatives sector AuM, however, rose by 15 per cent year-on-year to S$646 billion. In particular, private equity, venture capital and real estate saw strong inflows and continued valuation gains as investors increased exposures to private assets for return enhancement and portfolio diversification.

Forex
In a separate report, MAS said that Singapore’s average daily foreign exchange trading volume reached a new high of $633 billion in April 2019, up by 22 per cent on a year before. In global terms, the jurisdiction ranks third with a 7.6 per cent share of global FX volume in April 2019. These figures were released today in the 2019 Triennial Central Bank Survey of the global FX and over-the-counter derivatives markets conducted by the Bank for International Settlements (BIS).

The growth in Singapore’s FX market was broad-based across G10 and emerging market currencies, reflecting Singapore’s standing as a well-diversified international financial centre. The top five traded currencies in Singapore were the US dollar, Japanese yen, euro, Australian dollar and Singapore dollar, with trading volumes rising between 24 per cent to 45 per cent, with the exception of the Japanese yen, which posted a 4 per cent decline in volume.