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Wealth in Singapore: Sizing the Market Opportunity

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Summary
 
 Singapore is one of the worlds pre-eminent offshore investment centers, with 81% of the wealth invested in funds sourced from non-residents. However, the onshore market is a major source of assets under management (AUM) in its own right, with 1.0 million affluent individuals despite the city states small population. As a regional trading hub Singapores growth rates are closely tied to the health of regional powerhouses such as China, India, and Indonesia; however, even with growth slowing in some of these economies, Singapores wealth market will continue to post rates that are the envy of the developed world.
 
 Key Findings
 
 -  HNW individuals totaled 29,600 in 2015, a tiny proportion of the overall population and well below the levels seen in the US or Switzerland.
 
 -  HNW liquid assets are expected to grow by roughly 7.5% a year between 2015 and 2019.
 
 -  Bonds will be the fastest-growing asset class, but more due to greater availability than client demand.
 
 -  While Singapore attracts significant offshore investment, residents are also keen to invest abroad - 34% of AUM is invested offshore
 
 Synopsis
 
 Verdict Financials “Wealth in Singapore: Sizing the Market Opportunity” analyzes the Singaporean wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
 
 Specifically the report:
 
 -  Sizes the affluent market (both by the number of individuals and the value of their liquid assets) using our proprietary datasets.
 
 -  Analyzes which asset classes are favored by Singaporean retail investors and how their preferences impact the growth of the total savings and investments market.
 
 -  Examines HNW clients attitudes towards non-liquid investments, such as hedge funds, property and commodities.
 
 -  Identifies key drivers and booking centers for offshore investments by Singaporean HNW clients.
 
 Reasons To Buy
 
 -  Benchmark your share of the Singaporean wealth market against the current market size.
 
 -  Forecast your future growth prospects using our projections for the market to 2019.
 
 -  Identify your most promising client segment by analyzing penetration of affluent individuals in Singapore.
 
 -  Evaluate your HNW proposition by understanding the investment mix of the local onshore investment market.
 
 -  Review your offshore strategy by learning HNW motivations for offshore investments and their preferred booking centers.
 

 

EXECUTIVE SUMMARY
Singapores small domestic wealth market is as attractive as its large offshore sector
Key findings
Critical success factors
SIZING AND FORECASTING THE SINGAPOREAN WEALTH MARKET
While primarily a major offshore center, Singapore also has a substantial onshore element
Offshore investors do not book in Singapore to keep their funds in deposits
In contrast, managed funds are dominated by offshore AUM
Favorable domestic conditions will drive further expansion in onshore wealth
A sizable proportion of Singapores population will move into the affluent market in the coming years
The bulk of Singapores onshore wealth is concentrated in the hands of the affluent
HNW portfolios above $10m in AUM will experience the highest growth
DRIVERS OF GROWTH IN THE SINGAPOREAN WEALTH MARKET
Total retail investments growth moderated in 2015 but should bounce back
Growth in retail savings and investments will rise and steady in the coming years
Onshore wealth is still largely a deposit game - a stabilizing factor for future savings and investments growth
Wealth invested directly in the equity and bond markets has risen, but deposits will have an enduring allure
Deposits have been a drag on wealth growth, and this is set to continue
Singaporeans tend to favor deposits, with little change forecast
GDP growth is moderating once again and inflation is negative
After a brief splurge, bond holdings will grow more slowly in the future
Equities and mutual funds have been held back by poor market performance
The STI has struggled to post solid year-on-year returns
The performance of the stock market has the ability to stampede retail equity investors
Mutual funds will only slowly regain their share of retail investors portfolios, as inflows remain steady
HNW INVESTMENT PREFERENCES
Illiquid investments make up a significant percentage of onshore assets
Property holds a long-term attraction for HNW individuals
Private equity and hedge funds are also popular HNW investments
Offering commodity investments is a good strategy in what remains a regional trading hub
Offshore investments drain 34% of Singaporean HNW wealth from local institutions
Onshore banks need to offer offshore services to capture a greater share of HNW portfolios
A greater range of investment options is the top driver for offshoring wealth
Global links will help wealth managers capture much of the wealth booked offshore
Singapore has been more open to DTAs than TIEAs, but this is changing
Tax rates are low and stable in Singapore, making it an attractive destination for foreign and local wealth
APPENDIX
Abbreviations and acronyms
Supplementary data
Definitions
Affluent
Bonds
Cash
Deposits
Domicile
DTA
Equities
FATCA
HNW
Liquid assets
Mutual funds
Onshore
Residency
TIEAs
Methodology
Verdict Financials 2015 Global Wealth Managers Survey
Verdict Financials 2014 Global Wealth Managers Survey
Global Wealth Model methodology
Global Retail Investments Analytics methodology
Bibliography
Further reading
About Verdict Financial
Disclaimer


List Of Tables

 Table 1: Average monthly income from work per employed household member by deciles , 2000-15
 Table 2: Personal income tax rates and charges, 2012?16
 Table 3: Singapore: adult population segmented by affluent category and asset band (000s), 2010?14
 Table 4: Singapore: adult population segmented by affluent category and asset band (000s), 2015e?19f
 Table 5: Singapore: total liquid wealth segmented by affluent category and asset band ($bn), 2010-14
 Table 6: Singapore: total liquid wealth segmented by affluent category and asset band ($bn), 2015e-19f
 Table 7: Singapore-US dollar exchange rate, December 31, 2014 and December 31, 2015


List Of Figures

 Figure 1: Deposits are mainly an onshore market in Singapore
 Figure 2: Funds see the strength of the offshore center shine through
 Figure 3: The number of affluent individuals in Singapore grew well below average in 2015
 Figure 4: 2016 will see a rebound in growth, but years of double digit increases are behind Singapore
 Figure 5: Growth in retail wealth is slowing as economic growth has dipped
 Figure 6: Lower growth will mean deposits creep up as a proportion of retail assets
 Figure 7: All asset classes except bonds will see lower growth going forward
 Figure 8: Singaporeans have returned to the deposit market as a store for their savings
 Figure 9: Singaporean Savings Bonds have rebooted the retail bond market
 Figure 10: Singapores status as a financial hub can easily be seen in the dominance of financials
 Figure 11: Local stock market performance has not encouraged investors into the market
 Figure 12: Equity investments have become more important to the investment management community
 Figure 13: Local direct property has reduced as a share of the non-traditional portfolio
 Figure 14: Singaporean investors hold a significant proportion of their wealth offshore
 Figure 15: Access to better investment options drives Singaporean HNW investors to offshore wealth
 Figure 16: European wealth centers compete with Asian investment opportunities
 Figure 17: Singapore has aggressively pursued tax agreements with partners around the world
 Figure 18: Stamp duty is payable by both sellers and buyers of fixed property in Singapore


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Reports Details

Published Date : May 2016
No. of Pages :45
Country :Singapore
Category :Finance and Banking
Publisher :Verdict Financial
Report Delivery By :Email
Report Delivery Time :12 to 24 hours after placing the order.

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