1st June 2012
Singapore, despite becoming self-governing only in 1959, has developed into the 5th busiest port in the world, 4th leading financial centre, 3rd largest oil refining centre, 2nd largest gambling centre and the leading oil-rig producer. In addition, the state has been recognised as the easiest place in the world to do business, ranked consistently as one of the least corrupt countries in the world, and has managed to retain a AAA rating from the 3 leading credit rating agencies. It is due to take over from Switzerland as the world’s leading wealth management centre in 2013. There are more $ millionaire households per capita than any other country. The presence of strong protection of property rights, efficient government, and a low tax regime has been critical to the economic and financial growth of Singapore. The IMD World Competitiveness Yearbook published recently showed Singapore as the 4th most competitive country in which to do business.
From an investment perspective, there is a large of pool of well managed companies which are not only generating strong returns, but also have good corporate governance standards. On a recent 2 week trip to Singapore, I met with several companies which were market leaders in their sectors, delivering strong profits and dividend growth, often with little or no leverage. The macro picture is one of growing GDP growth, low inflation and unemployment and a budget that is in the black. The lack of leverage at a corporate, personal and sovereign level augurs well for Singapore. It will no doubt assist in further entrenching its position as a hub in Asia, when there is a recovery in the global financial markets.
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