Singapore is one of the world’s 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 state’s small population. As a regional trading hub Singapore’s 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, Singapore’s wealth market will continue to post rates that are the envy of the developed world.
- 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
This report “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
- The Malaysian wealth market weathered a rough 2014 well
- Key findings
- Critical success factors
2. Sizing And Forecasting The Malaysian Wealth Market
- Malaysia is developing as a financial center and as a wealth market
- The affluent population is still shy of the 1 million mark
- Investible assets are concentrated within the upper tiers of the wealth market
3. Drivers Of Growth In The Malaysian Wealth Market
- The retail investment market will see strong growth
- Retail investments are expected to experience improved growth into the future
- The Malaysian investment market is more developed than most markets in Asia Pacific but its retail sector is still focused on deposits
- Growth will be healthy across all asset classes, but investors will turn to mutual funds going forward
- Retail deposit growth will continue to outstrip GDP growth
- Deposit growth moderated in 2015 but will pick up over the forecast period
- Economic growth will be steady rather than spectacular, but will sustain growth in deposits
- The robust bond growth of 2015 will not persist, returning to 2014 levels
- Local wealth managers are highlighting their fixed income offerings
- Equities and mutual funds will rebound to stronger growth in 2016
- The Kuala Lumpur Stock Exchange suffered in 2015
- Equities are a major asset class but have not experienced widespread take-up among consumers
- Mutual funds in Malaysia are mainly equity and bond plays
4. HNW Investment Preferences
- Onshore HNW portfolios are concentrated in simple traditional assets
- Just under one quarter of Malaysian HNW assets are in non-liquid asset classes
- Offshore banking is a not insignificant drain on onshore assets
- Offshore investments among HNW investors is slightly below the Asia Pacific average
- The lack of onshore investment options is preventing wealth from coming home
- Australia, Singapore, and Hong Kong are the primary beneficiaries of offshore investment
- Abbreviations and acronyms
- Supplementary data
- Liquid assets
- Mutual funds
- Mass affluent
- Sharia investments
- Global Wealth Model methodology
- The main sub-model
- Global Retail Investments Analytics methodology
- 2015 Global Wealth Managers Survey
- Further reading
List of Tables
Table 1: Malaysia: adult population segmented by affluent category and asset band (000s), 2009-14
Table 2: Malaysia: adult population segmented by affluent category and asset band (000s), 2015e-19f
Table 3: Malaysia: total liquid wealth segmented by affluent category and asset band ($bn), 2009-14
Table 4: Malaysia: total liquid wealth segmented by affluent category and asset band ($bn), 2015e-19f
Table 5: Malaysian ringgit-US dollar exchange rate, December 31, 2014 and December 31, 2015
List of Figures
Figure 1: The core affluent investor market remains restricted to a tiny (but growing) elite
Figure 2: More than half of all financial assets in Malaysia are held by mass affluent investors
Figure 3: Growth moderated in 2015, reflecting a weaker oil and gas sector, but is expected to improve in 2016
Figure 4: Deposits dominate Malaysian investors' onshore holdings
Figure 5: The outsized share of deposits in the Malaysian market has held back growth
Figure 6: Retail deposits should see steady growth over the forecast period, but the heights of 2011?12 are behind the market
Figure 7: Bond growth was healthy in 2015, but a return to 2014 growth seems likely
Figure 8: The stock market in Malaysia has struggled since 2013
Figure 9: Equities and mutual funds will see stronger growth in 2016
Figure 10: Mutual funds in Malaysia are still mainly a way to gain equity exposure
Figure 11: HNW investors have been relatively open to alternatives, strongly favoring property
Figure 12: HNW Malaysians rank well below other Asia Pacific markets in terms of offshore investments, but the share is increasing
Figure 13: Perceptions of a better range of investments compels HNW investors to book assets abroad
Figure 14: Local booking centers attract the bulk of Malaysian offshore investment
Figure 15: Malaysia has pursued comprehensive DTAs