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

 |  Includes: C, CS, EWS, HSBC, MER, SGF, UBS
by: SA Eli Hoffmann

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 (NYSE:C) leads the Singaporean assault on Asian wealth, followed by UBS (NYSE:UBS), Credit Suisse (NYSE: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 (NYSEARCA:EWS) and closed-end fund Singapore Fund (NYSE:SGF) offer U.S. investors exposure to the broader Singaporean economy.]

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