Singapore Is Asia's Switzerland; Opportunites for Citi, UBS, Others - Barron's

Barron's says Singapore may soon surpass Switzerland as the world's number-one private-banking hub, thanks to Asia's burgeoning ranks of millionaires. Figures show private-banking assets in Singapore have sextupled to over $300 billion since 1998. "China is creating 30,000 new millionaires every year, and India, Indonesia, Taiwan, Korea aren't too far behind," one private banker says. "We need an army of well-trained private bankers to help manage their wealth."

Presently, Singapore is home to 6% of global private-banking assets, vs. Switzerland's 18%. But with breathtaking growth that could hit 30% this year, compared to single-digit growth in Switzerland, the balance of power could shift swiftly. Advantages of Singapore private-banking are secrecy laws even stricter than Switzerland's; an opportunity to avoid Europe's mandated "forced heirship," which forbids disinheritance of family; and low taxes and tax free capital gains.

How to capture Singapore's swell?

Citigroup (C) leads the Singaporean assault on Asian wealth, followed by UBS (UBS), Credit Suisse (CS), HSBC (HBC) and Merrill Lynch (MER). "We're only just scratching the surface as far as tapping private-wealth in Asia is concerned," says Citigroup's Deepak Sharma. "With its excellent infrastructure, exceptional talent and one of most pro-active regulatory environment in the world, Singapore is a natural hub for private wealth management."

[Editor: iShares Singapore ETF (EWS) and closed-end fund Singapore Fund (SGF) offer U.S. investors exposure to the broader Singaporean economy.]

See also:

• Huge Upside In Singapore ETF Over Next 3-5 Years - Barron's
• International ETFs to Benefit From the Weak US Dollar

Comments

[ussmls7:]

Now the crooked firms from wall street are hooking into more big fish, as the American tax payers are forced to pay for the crooked deals that Goldman & the top firms pushed arround the world. These high payed jerks should be sent down south for some real learning on what happens for bad behavier. Knowling selling a defective product to the public for greed is bad, and if they try that crap over there, they dont put you in front of a bought off congressial hearing, they shoot you and take all your money.

2008 Jan 14 12:11 PM

[Armelle Guizot:]

Since when are these rules ever respected ? Switzerland (un)like Singapore have been main low-key political but high profile economical corrupted heavens expecting free insurance without ever really paying for it-i don't remember profiting from expats, getting free rides on their heads and getting bonuses to pay my rents and groceries ! more than a decade of stollen perks ! And too tired to even ever profit from them ! That is the ultimate difference between an expat and "an exploited employee" (for lack of better terms - no word for it). Yeap stretching both ends will become more difficult for these hubs.

2008 Mar 26 11:45 AM

[silver-bullet:]

Yeah Eli, you couldn't have said it better.

I know some friends from Singapore, and I can't believe they actually don't pay capital gains taxes there! Yes, that's their 'birth right', given to the Singaporean government. I believe foreign investors can benefit from this too. Specifically, I'm thinking of investing in local firms benefiting from the China factor. I've read your article on water, Eli, and I'm seriously considering investing in those 3 firms after checking out their gigs.

By the way, ussmls7, they don't shoot you there - they FLOG you! Crime really doesn't pay there. Thanks to long standing law inherited from British colonial days.

2008 May 25 02:42 AM