My Favorite Investment Haven For the Next Decade
The lion is about to roar.
And for those who track the source of the sound, small fortunes await.
The lion is the tiny, island city-state of Singapore – a Sanskrit word meaning Lion City. The country sits at the heart of Southeast Asia, was once governed by British rule, and has its key cultural ties in North Asia – specifically, China.
Individually, those defining characteristics don’t mean much, since many other countries can claim at least one of those attributes. But combined they mean that Singapore is on the cusp of emerging as the most-crucial destination for hundreds of companies desperate to access the rising middle-class of China… as well as the exploding class of emerging consumers all across Southeast Asia, particularly Malaysia, Indonesia, Thailand, the Philippines, and Vietnam.
That consumer population is among the fastest growing in the world, and at the same time pocketbooks across the region are fattening at a rapid pace. Smart companies see the opportunity in the region… and they are rushing in to use Singapore as a base, for reasons I’ll explain in a moment.
To me, it all points to one profitable conclusion. Singapore will be one of the world’s top investment havens for at least the next decade, if not longer…
Singapore: Better than Hong Kong and as Safe as Switzerland
There’s no question that Hong Kong is an important place to invest some of your money. The city is the gateway to China and one of the three premiere stock markets in the world, arguably more important today than London and New York.
But Singapore is important for a different reason.
Where Hong Kong mainly provides a gateway into China, Singapore’s access includes China and its Southeast Asian neighbors. More important, because it is physically part of Southeast Asia it has a far-deeper understanding of regional tastes and desires. Better still, it has strong banking laws and property rights, which is why many refer to it as the Switzerland of Asia.
And all of that gives Singapore a huge advantage – and the money pouring into the country confirms it. Money is flowing into Asia these days from across the world, but it’s looking for more opportunities than are available in China alone. Savvy institutional investors recognize that uniquely profitable opportunities also exist in fast-developing countries like Malaysia and Indonesia that are packed with hungry consumers that have increasing amounts of money to spend. And the easiest way to reach them is through Singapore.
But those investors are not alone. Many of the nouveau wealthy from Malaysia, Indonesia, Vietnam and elsewhere across Southeast Asia are heading with their cash to Singapore as well, largely because the Singapore dollar, like the Swiss franc, is one of the three best-managed, most-stable currencies in the world. They live in currency and political regimes that haven’t always been stable, and they see Singapore as one of the world’s truly safe havens, right up there with Switzerland.
And it’s a place where companies globally and regionally want to relocate because Singapore currently is the single best place to build a business. Here’s a glimpse of what makes it so attractive:
- #2 in the world as the city with the best investment potential
- #1 for having the most-open economy for international trade and investment
- #1 for the easiest place to do business
- #3 most-competitive country in the world
- The least bureaucratic place for doing business in Asia
- The most-transparent economy in the world
- #5 globally in having the least government corruption
Singapore also operates in English and is based on a British legal framework, making the country easy to navigate culturally for the non-Asian companies and investors who are flooding in to profit from Southeast Asia’s growth. And, as the statistics above show, it is arguably the one market in the world that is most-conducive to business.
A Major Cog in Asia’s Consumer Economy
My first brokerage account in Asia was in Singapore. And it’s a city I love to visit. I know from first-hand experiences, and from meeting with executives of Singaporean companies, that this country is better-positioned than any other to benefit from what’s now happening beyond its borders.
Asia outside of Hong Kong, Singapore, Taiwan, South Korea, and Japan is urbanizing at a pace faster than the rest of the world, according to United Nations research. Local economies across the region are growing more affluent every year. Their populations are better educated much like it used to be in America, when young generations fully expected to live a better life than their parents. Also, worker salaries are rising rapidly and consumer demand for material goods is exploding.
Singapore’s government sees the opportunity it has to become a major cog in Asia’s consumer economy. The Prime Minister has established an Economic Strategies Committee to “deepen capabilities among Singapore companies to seize opportunities in Asia.” Meanwhile, Singapore’s trade agency this summer outlined a “sense of urgency” for Singapore’s largest companies to expand abroad to capture the growth of Asia’s emerging middle class.
That trend has many more years to play out, and Singapore promises to be at the heart of it all. The country’s stock exchange is loaded with consumer-products companies in everything from food and beverage, to tourism, healthcare, and retail.
If you want to participate in Asia’s emerging consumer class, you have to start in Singapore. The lion is about to roar.
Until next time, keep a global view…
Jeff D. Opdyke
Editor, Emerging Market Strategist
P.S. I’ve already put subscribers to my Emerging Market Strategist service in some Singapore companies that will be huge beneficiaries of the rising consumer class in China and Southeast Asia. One such company is a fast-growing, Singaporean bakery chain that already operates nearly 400 stores across 13 countries in Asia and the Middle East. For more exciting opportunities that Western investors rarely pay attention to, click here.