SINGAPORE: Not everyone was pleased when Donald Trump was re-elected President of the United States earlier this month, but it may be good news for Singapore even as it could mark the opposite for regional rival Hong Kong.
A Nov 27 Fortune piece, which opened with how Prime Minister Lawrence Wong called Mr Trump to congratulate him within minutes of his win, quotes Future-Moves Group CEO Devadas Krishnadas as saying that the Trump reelection is a “net positive for Singapore, a net negative for Hong Kong.”
While Singapore has prospered over the past few years, this may continue into the US President-elect’s upcoming term, given Mr Trump’s moves toward increasing tariffs on China, which Hong Kong has shifted closer to.
In contrast, Singapore enjoys good relations with economic superpowers, and Mr Devadas added, “Singapore will be seen as the only safe place in Asia for U.S. and European capital.”
Last year, assets under management in the city-state grew to US$4.1 trillion (S$5.5 trillion), an amount higher than in Hong Kong, where they reached US$3.9 trillion (S$5.23 trillion).
The Fortune piece noted that political stability, a lenient tax regime, and relative neutrality have played a large part in attracting capital from overseas, and Singapore’s three biggest banks—DBS Bank, United Overseas Bank (UOB), and OverseaChinese Banking Corp.
(OCBC)—have been instrumental in leading the way.
Singapore has also made inroads in wealth management, a key part in overtaking Hong Kong as a regional financial hub. This is why incentives have flown in that direction, resulting in a rise from 400 single-family offices at the end of 2020 to over 1,600 at present.
Hong Kong, however, should not be counted out. After its struggles over the past few years, things have begun to look up for Hong Kong, and the Fortune piece noted that UBS has said it may surpass Switzerland as the biggest hub for cross-border finance in less than two years.
Neither is the Trump presidency expected to be a complete win for Singapore due to the threats of higher tariffs, something that would directly affect the city-state’s trade-reliant economy.
Nevertheless, even if Hong Kong’s fortune continues to improve, this is likely to be advantageous for Singapore. If China’s economy improves, this will benefit the city-state.
The opposite, however, does not necessarily follow since Singapore has better access to other markets than Hong Kong, given Hong Kong’s ties to China. /TISG
