New money inflows to Singapore jump 59% to a record S$448b in 2021

[Blueray]

New money inflows to Singapore jump 59% to a record S$448b in 2021

SINGAPORE can absorb record inflows of new money, the central bank chief said, allaying concerns of a real estate bubble even as rents and prices surge to unprecedented highs.

The Asian financial hub attracted S$448 billion last year, 59 per cent higher than the previous year, the latest data from the Monetary Authority of Singapore (MAS) show.

“When a large sum of money comes into any country, you should be worried about it,” MAS managing director Ravi Menon said in an interview with Bloomberg Television’s Haslinda Amin. One such concern is flowing into the property market driving up prices. Rather than blocking money coming in, the regulator has imposed measures on the real estate sector to prevent overheating. “We’ve got that under control,” he said.

Singapore’s efforts to build an international wealth hub are paying off as the city enjoys a post-Covid resurgence, attracting investors drawn to its stability. Assets managed by local firms soared 16 per cent in 2021 to US$4 trillion, mostly from overseas, exceeding the global growth rate. Investors from US hedge-fund titan Ray Dalio to Indian billionaire Mukesh Ambani are setting up offices to manage their personal wealth.

The housing market has defied a slump reported in other major markets including Australia, Hong Kong and Canada. As prices jumped 7 per cent in the first nine months - including a sizzling 13 per cent in the third quarter alone - the government took steps to cool the market. Landlords meanwhile are asking tenants for big rent increases, sometimes as much as double, when they extend leases.

The inflows, which are roughly three quarters of Singapore’s nominal gross domestic product, come on top of gains from higher asset prices last year, according to the central bank. The assets are helping to boost the financial hub as it seeks to add as many as 20,000 finance jobs over five years, in areas including wealth management and sustainable financing.

Asia flows

Menon said money is coming from growing wealth across Asia, where the rich are seeking a place to invest. He acknowledged that North Asia’s affluent contribute a large portion of asset flows into Singapore.

“They are richer, they have more investible assets,” he said, speaking ahead of Singapore’s FinTech Festival that starts on Wednesday (Nov 2).

In China, Asia’s largest wealth market, assets plummeted following the Communist Party congress, where President Xi Jinping solidified his grip on power.

Asked whether China may see accelerated capital outflows, Menon said it’s too early to tell.

“There’s already some happening,” he said. “Some of it have come to Singapore, you would have seen in the last few years. I am not sure we are looking at any marked pickup.”

In the meantime, Singapore’s capital and financial markets, as well as its banking system, are deep and liquid enough to handle large fund flows, he said. MAS, which also serves as a financial regulator, is strict when it comes to illicit fund flows, repeatedly reminding financial institutions to be on guard, Menon said.

“There’s so much money coming in, you can choose,” he said.

Other interview highlights:

MAS has been focusing on strengthening disclosure rules by listed companies to deter firms from misconduct

Singapore is not aiming to become a cashless society even though digital payments are becoming common 

https://www.businesstimes.com.sg/government-economy/new-money-inflows-to-singapore-jump-59-to-a-record-s448b-in-2021

 

curious to see what the inflow amount is for 2022 ...

[Windwaver]

It'll just grow because HK is no longer so popular.

[Watwheels]

Not surprised. Recently several nearby countries have shown instability in their politics. Countries like HK, Myanmar, Taiwan and China. Individuals and companies will run and look for a safe haven. Then there are also other FTs.

What is not good for us regular folks are property and car prices skyrocket. Landlords of course happy cos increase in rental income. Banks will be happy. Our gahment also happy. That's why need to increase gst soon. Outlook for our economy looks good even though other countries especially in Europe will have that impending energy crisis in winter and food inflation cos of the war there.

[D3badge]

4 minutes ago, Windwaver said:

It'll just grow because HK is no longer so popular.

Hong Kong is history since the implementation of security law

irony the British brought prosperity to HK with 150 years and CCP brought decline in just 25 years 😂

look at HSI today, the future confidence and wealth of Hong Kongers in general today

Edited November 2, 2022 by D3badge

[Windwaver]

11 minutes ago, D3badge said:

Hong Kong is history since the implementation of security law

irony the British brought prosperity to HK with 150 years and CCP brought decline in just 25 years 😂

look at HSI today, the future confidence and wealth of Hong Kongers in general today

[yishunite]

"We’ve got that under control,” 🤣😂🤣😂🙃

 

[Jamesc]

I hope the new money don't put in property but used cars.

[Jamesc]

I always liked new money.

Wifey put them in Ang pow packets every year.

[Jamesc]

New money will help make RM 4 or not?

[yishunite]

10 minutes ago, Jamesc said:

I hope the new money don't put in property but used cars.

Fixed supply stuff like housing, COEs... price can only go one direction. Property landlords rejoice! You should upscale to only deal secondhand luxury cars. B&B car no margin. Huat huat huat ah!

[Kb27]

maybe coming from russian oligarchs trying to park their billions elsewhere.

[Throttle2]

No necessarily good for Singaporeans from a social aspect

[Carbon82]

Hot money good what, higher property price would means HDB can sell new flat at higher price and incur lower deficit.

But wait that also mean HDB cannot low ball when buying land and enblock unit. Alamak... 

HDB says it incurred record deficit of $4.4b but doesn’t reveal original cost of land acquired through compulsory acquisition

While the figures quoted in the above article are highly debatable, there are several cases where the owners have claimed that SLA pay lower than maker value when acquiring their lands / properties, and some even make it to news.

That aside, some of these lands were not developed immediately after acquisition, but can be left empty for years or decades, so how do we calculate the land cost in these cases? It is another number game... 

[Wt_know]

COE > $100K

HDB > $1M

Kailan is $91.00

it's quite obvious isn't it?

 

[Throttle2]

Good luck Singapore Good luck

[inlinesix]

5 hours ago, Carbon82 said:

Hot money good what, higher property price would means HDB can sell new flat at higher price and incur lower deficit.

But wait that also mean HDB cannot low ball when buying land and enblock unit. Alamak... 

HDB says it incurred record deficit of $4.4b but doesn’t reveal original cost of land acquired through compulsory acquisition

While the figures quoted in the above article are highly debatable, there are several cases where the owners have claimed that SLA pay lower than market value when acquiring their lands / properties, and some even make it to news.

All that aside, some of these lands were not developed immediately after acquisition, but can be left empty for years or decades, so how do we calculate the land cost in these cases? It is another number game imo... 

These land likely has been revalued to market value.

At 1979, what is the market value of those land?

The highlighted part have to ask Ah Gong.

[Kxbc]

44 minutes ago, inlinesix said:

These land likely has been revalued to market value.

At 1979, what is the market value of those land?

The highlighted part have to ask Ah Gong.

Accounting standards have changed a lot this decade or so. The fair market valuation concept in financial statements is unknown to many. 

[inlinesix]

2 minutes ago, Kxbc said:

Accounting standards have changed a lot this decade or so. The fair market valuation concept in financial statements is unknown to many. 

Govt accounting may not fully follow GAAP.

It is harder to explain to non-accountants.

For SLA land bank, it is easier to understand.

Edited November 2, 2022 by inlinesix