| |
| |
|
Investing Information |
|
|
|
The Switzerland of Asia Shines
In many respects, Singapore is the Switzerland of Asia. Begun in 1819 as a British trading colony, the Republic of Singapore was founded in 1965 under the leadership of the current Prime Minister's father, Mr. Lee Kuan Yew. While it is only 1/5 the size of Rhode Island and three times the size of Washington D.C., it is perhaps the most strategically important global trading, finance and service nexus in Asia. Here is why you should consider investing in Singapore. While Hong Kong and Shanghai will argue, Singapore is the busiest port in Asia situated next to the vital trading channel, the Straits of Malacca. Unlike South Korea and Taiwan, which are heavily dependent on the cyclical electronics industry, Singapore has a well-diversified economy. 70% of its GDP is attributable to finance and services. Singapore's accounting rules and regulations are amongst the most conservative in the world. For example, its rules on inventory accounting and the expensing of stock options are more conservative than those in the United States. Trade Surplus Despite only 1.6% of its land being suitable for agricultural activities and having to import almost everything including water, Singapore manages to have a trade surplus. Singapore has a balanced budget, a stable currency and still manages to allocate 5% of GDP for defense. It represents a multi-ethnic society with 77% Chinese, 14% Malay and 8% Indian. Singapore has a parliamentary form of government, an English common law judiciary system and is corruption and drug free. Slowly but surely, a freer political climate is developing with a Speaker's Corner instituted in 2000 and the ability to express one's views freely anywhere with the exception of the sensitive topics of race and religion Singapore's educational performance is legendary. The fact that it has twice as many Internet users as television sets is telling. Singapore's New Resorts Singapore is also changing with the times. To generate more investment, tax revenue, and add a bit of sparkle, Singapore recently approved the development of two large casino resorts. It is part of a strategy to reduce the country's dependence on manufacturing and to position itself as a livelier tourism destination. Of course, there will be restrictions. Singaporeans will have to pay a $60 entry fee and the gambling areas will be restricted to just 5% of the resort. According to projections, the resorts will lead to $4 billion in investments, $3.5 billion in annual revenues, 35,000 jobs and $350 million per year in taxes and fees. Singapore has also made great strides in patching up misunderstandings with its neighbor to the north, Malaysia, from whom it split in 1965. Tax issues, water supply agreements and transportation arrangements are all moving much more smoothly. Singapore is adept at holding on to its manufacturing base even as several large semiconductor manufacturers such as National Semiconductor announced plans to move plants to China and Malaysia. For thirty years, Singapore has relied on electronics as the backbone of its manufacturing sector but is making the transition to a more service and R&D economy. Electronics is about 40% of manufacturing output but accounts for only 5% of employment. Surprisingly, some firms are moving manufacturing centers from China to Singapore due to its infrastructure, logistics and laws protecting intellectual property. Exxon Mobil, Shell and Sumitomo are expanding petrochemical facilities and Singapore added 27,000 manufacturing jobs last year by moving up the food chain. After 8.4% GDP growth in 2004 and a weak start early this year, Singapore's economy posted 12% plus growth in the second quarter and should be a solid performer over the next few years. Continued strong global demand for transportation, communications and logistics services, increasing IT spending, rising consumer spending and property prices and expanded tourism all point to continued growth. An easy and smart way to invest in Singapore is through the Singapore iShare (EWS) which tracks the Singapore Straits index. It is up 26% over the past year and up 9.4% year to date. Its largest positions are in Singapore Telecom, United Overseas Bank and DBS Bank. Even better, it is tax efficient and has an annual expense ratio of only 0.59%. Trading at 14 times projected earnings, the Singapore market is still attractive. By comparison, the Switzerland market and iShare (EWL) is trading at 18 times earnings. The epitome of quality and increasingly creative, Singapore is a great core holding for any global portfolio. Carl Delfeld is head of the global advisory firm Chartwell Partners and editor of the Chartwell Advisor and the Asia Investor Intelligence newsletters. He served on the executive board of the Asian Development Bank and is the author of The New Global Investor (iUniverse:2005). For more information go to www.chartwelladvisor.com or call 877-221-1496 Carl Delfeld is head of the global advisory firm Chartwell Partners and is editor of the "Chartwell Advisor" and the "Asia Investor Intelligence" newsletters. He served on the Executive Board of Directors of the Asian Development Bank in Manila and is the author of The New Global Investor (iUniverse: 2005). For more information go to http://www.chartwelladvisor.com or call 877-221-1496.
MORE RESOURCES:
Investing - Google News |
|
|
|
RELATED ARTICLES
Value Investing By definition, value investing is the process of selecting stocks that trade for less than their intrinsic value. A value investor typically selects stocks with lower than average price-to-book or price-to-earning ratios. It Is Never Too Early To Start A Roth IRA! The Roth is kind of weird until you get used to it in terms of how much you can put in (contribute) each year depending on how much you earn (compensation). Because of this you really have two limits, one dealing with your compensation and the other dealing with your contribution. Retirement or Financial Freedom? In the past most people never retired. They died. Holy Grail Investments Every year I go to the Money Show in Orlando, Florida. Thousands attend. The Three Legged Stool My paternal grandparents were born near Lake Como, Italy. My grandfather learned how to farm, and he did just that until he died chopping wood at age 88. Creating a Financial Future--Putting Your Plan Into Action Part 2 Real Estate can be a useful tool for investing. The simplest real estate investment is not truly an investment, but a cost-reduction - that is owning your own home. Focus Your Investments on the Long Term "All human power is a compound of time and patience!" Honore de Balzac (1799 - 1850)Long term investing or "Buy and Hold" is not about hunches, emotions, stock tips, market timing or making quick profits! It's about using proven long-term strategies to accumulate wealth over time!A large part of the daily volume on the exchanges is due to traders who hope to make a small profit by taking advantage of small discrepancies in the pricing of securities, or who are able to buy a stock as soon a favorable analysts report is issued and who hope to profit before the inevitable runup.The instantaneous access to information that financial institutions have gives them an enormous advantage over the individual investor when it comes to short-term trading. Variable Annuities You know all the articles you read about annuities that have extremely high fees? And the ones that people lose a lot of money in? Well, these are better known as variable annuities. yes, they do have some advantages. Realistic Investing Expectations Over the long term stocks have provided us with great average return results. But this average return masks a great deal of volatility, because returns have fluctuated within a very wide band. Advice for International Investors on How to Safeguard Their Profits What are the risks?Today, investors are increasingly turning to global markets to find opportunities for profit, giving urgency to the issue of protecting returns from foreign exchange risk. While there are many excellent investment opportunities to be found all over the world, volatility in the currency markets can and does affect the profitability of these investments. Creating a Financial Future - Putting Your Plan Into Action Part 1 This column has previously discussed "picturing the future that we desire", and outlining a plan to achieve it. We mentioned that the plan must include goal-setting, measurement, and implementation. Have You Ever Seen A Map of the World Turned Upside Down? For those accustomed to viewing things a certain way, it is quite disconcerting. One almost expects the ocean to pour out. Success Trading: Some Basic Terminology for New Traders The world of trading can get very complex because the financial markets are complex. There thousands and thousands of successful traders out there today. Investing 101: Risk Terminology - BETA About thirty years ago, statisticians armed with all of their statistical theories began to confront the financial markets. A handful of useful tools emerged that the average investor should be familiar with when they look to purchase stocks. Day Trading Strategy or Stock Trading Software? The Way You Pick Stocks Affects Your Results The trading method you employ to approach the stock market can make a big difference in your results.Stock trading is a very competitive field and in order to succeed you need to FOCUS on a set of simple strategies that you can implement without hesitation. Investing As A Sport? I said last week that money doesn't generally buy happiness, but the lack of it can buy absolute misery. This, by the way, is not just my personal observation. Investing In Sons Business Could Cause A Real Family Feud Q: My youngest son wants to borrow $5,000 to start his own business. My wife is afraid to tell him no. 5 Ways To Protect Your Bond Portfolio From Rising Interest Rates The Federal Reserve recently raised its target federal funds rate for the first time since March 2000. This could be just the tip of the iceberg, though, as many experts believe rising inflation and a strengthening economy will spur continued rate hikes for the foreseeable future. Can Your Annuity Do This? Many people buy annuities according to their agent's recommendations. However, many people do not even know what they own. Who Wants To Be A Millionaire? I am sure you have probably read about the power of compound interest. And how if you invested $10,000 at 10% return and let it compound for 50 years you would have a little over 1 million dollars.
|
| home | site map |
| © 2006 |
