Retail Savings and Investments in Singapore - Coronavirus (COVID-19) Sector Impact

Retail Savings and Investments in Singapore - Coronavirus (COVID-19) Sector Impact

Summary

The coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel coronavirus a pandemic on March 11, 2020.

This report focuses on the impact of the coronavirus outbreak on the Singaporean economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts the publisher's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with most countries across the world registering declines in their economic growth for the year to date. Many economists and institutions have cut their forecasts as a number of countries officially slipped into recession.

Similarly, Singapore also went into recession in Q2 as the ongoing pandemic has resulted in a slowdown in exports, disruptions in global supply chains, a fall in tourism, and a decline in the domestic consumption of goods and services. With the government now easing some lockdown restrictions in a phased manner, a gradual recovery in the economy and the retail savings and investments industry should be observed.

Scope

• Singaporean retail savings and investments are forecast to contract by 0.1% over the course of 2020 as the economy has come to a standstill thanks to the impacts of COVID-19. Even though the STI Index is currently on its recovery trend, the performance has been characterized by extreme volatility and uncertainty, which will continue to have a negative impact on demand for risk assets throughout the year. Retail equity and mutual fund holdings are expected to take the brunt of the economy’s slowdown, with respective declines of 22.4% and 17.3%.
• Retail deposit holdings, on the other hand, fared better than initially expected courtesy of a flight to safety away from risk assets. According to Statistics Singapore, deposits increased by 3.8% in Q1 2020. However, more pronounced declines in risk asset holdings are expected to result in a total retail savings and investments holdings forecast in 2020 that is 3.9 percentage points (pp) lower than initially forecast before the onset of COVID-19.
• The effects on the different segments that make up the high-net-worth (HNW) market will be disproportionate. The financial services sector, which is the largest contributor to Singaporean HNW wealth, is taking a significant hit as the number of bad loans is expected to rise significantly.
• The healthcare sector - the second largest contributor to HNW wealth - is being less severely impacted. The iEdge SG All Healthcare Index, which measures the performance of the listed healthcare segment in Singapore, is up 58.9% year-to-date, having benefited from increased investment in robotic health workers and AI health management tools to tackle the crisis.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the Singaporean retail savings and investments industry.
• Understand the key market trends, challenges, and opportunities in the Singaporean retail savings and investments industry.
• Receive a comprehensive insight into the retail liquid asset holdings in Singapore, including deposits, mutual funds, equities, and bonds.