Posts tagged Hong Kong
Here’s some food for thought for anyone who says Singapore’s impressive GDP growth is entirely due to its China connections: Singapore’s GDP overtook Hong Kong’s in the first quarter this year and is projected to be larger at the end of the year.
Singapore’s quarterly nominal GDP was US63.9 billion, 10% higher than Hong Kong’s at $57.9 billion, according to a report by Bank of America Merrill Lynch economist Chua Hak Bin. It’s worth noting that Singapore’s dollar is free-floating while Hong Kong’s is pegged to the USD. The S$ has gained 8.2% against the Hong Kong dollar in the past year and 23.3% in the past decade. Still, Chua says it would have been “far fetched” to predict such a development just a decade ago, given Hong Kong’s greater proximity to China and Singapore’s more volatile neighborhood at the time of the Asian financial crisis.
Singapore’s population is also just 5.1 million, while Hong Kong’s is 7.1 million. The two find themselves frequently compared due to their status as independent (or autonomous) city-states, majority ethnic Chinese populations and the significant role played by the financial services sector in both places. Singapore recently revised its GDP growth forecast for 2011 up from 4-6% to 5-7%. Hong Kong is still no slouch, with 7.2% growth in Q1 2011 and its own upward-revised annual projection of 5-6% (from 4-5%).
source & article: Economic Times (India)
Assets under management in Singapore totalled S1.4 trillion (US$1.13 trillion) in 2010, up 13% on the previous year and recording a 16% growth average over five years.
The figures, along with new incentives like tax breaks and regulation simplification highlight Singapore’s competition with Hong Kong to be Asia’s major financial center. Hong Kong hasn’t released official asset management totals for 2010 yet, but its 2009 figure was US$1.09 trillion, a 45% growth on 2008. Singapore’s asset management sector grew 40% over the same period.
Reuters reports that of Singapore’s assets under management, 51% were in equities, 16% in fixed income, 12% in cash and money markets, 13% were in ‘alternative investments’ and 8% were in other mutual funds. The industry employed 11,200 people in Singapore, of which 2,700 were investment professionals.
On the same day, HSBC announced it plans to nearly double the pre-tax profit of its Singapore operation to US$1 billion within five years, adding 1,000 to its existing staff of 3,500 there. The move hints at another shift of focus towards Asia as HSBC, Europe’s largest bank, considers selling off its US credit card business.
Seven of the world’s top ten exporters of information & communications technology (ICT) are now Asian, accounting for 66% of all ICT exports. China and Hong Kong take the top two spots, while United Nations trade data for 2009 released this week shows Malaysia now in 8th position globally.
Total ICT exports from Malaysia were US$57 billion, or 36% of Malaysia’s exports.
43% of Hong Kong’s manufactured exports were ICT, making its economy the world’s most reliant on technology. Other Asians whose ICT exports make up more than 30% include China, Singapore, South Korea, Taiwan and the Philippines. Though some Asian countries experienced slight declines in ICT exports, Malaysia grew by 18% and India by a whopping 244%. ICT makes up around 12% of the world’s merchandise trade.
source & article: The Edge Malaysia
A contrast of angles today on the topic of ‘most globalized economies relative to GDP’: Malaysia’s Business Times opens with that country’s improvement from 33rd to 27th place on Ernst & Young’s Globalization Index, while Channel NewsAsia laments Singapore’s drop from first place to third.
The index gives the world’s top 60 economies scores out of 10 on issues such as trade openness, labor movement, exchange of ideas and technology, and capital flows. As tends to happen in these lists, versatile city-states and smaller countries ranked high with Hong Kong and Ireland taking the two top positions. Malaysia’s #27 ranking is respectable for a country its size, putting it a hair under Australia at #26 with the same aggregate score, and the United States at #28.
Malaysia’s best scores were on trade and capital movements, but lower on labor movements and exchange of ideas and technology. Singapore’s slip was also due to labor and technology issues, with slightly lower net migration and trade in R&D relative to GDP. Despite the different reception to the results, Ernst & Young has predicted that most countries on the list will continue to improve their overall scores between now and 2014, as emerging countries continue to shine and the global economic situation improves.
The Singapore Exchange (SGX) has introduced new measures designed to propel it into position as Asia’s most desirable place to list, by eliminating lunch breaks and establishing a S$194.96 million (US$151.5 million) “world’s fastest trading platform” called SGX Reach.
SGX Reach will be the first fast electronic trading system outside the USA and Europe. SGX, which wants to attract more listings but often struggles against Hong Kong and its closer local connections to win Chinese IPOs, is also pursuing an acquisition of the Australian Securities Exchange (ASX) worth US$8.4 billion. Improved technology, size and international reach may well be what it needs to fulfill its vision of regional dominance and global significance under ambitious CEO Magnus Bocker.
The new system claims a response time of 90 microseconds, and the ability to handle one million order-book changes per second. The London Stock Exchange Group’s ‘Turquoise’ platform, the current world’s fastest, has a response time of 126 microseconds. Despite the lightning fast times, exchanges still clear all trades made. Not to be outdone, the Hong Kong Exchange (HKEx) plans to extend hours and will fire up its own new system by the end of the year, which can handle 30-150,000 trades a second with a response time of nine milliseconds. The Tokyo Stock Exchange (TSE) will examine its trading hours again and will probably cut its lunch break by 30 minutes. It too is planning to speed up its trading system, which has crumbled under active trading demands a couple of times in recent years.
source & article: The Australian business
Think tank The Heritage Foundation and The Wall Street Journal have ranked Hong Kong first on their 2011 Index of World Economic Freedom for the 17th year in a row, based on criteria in 179 countries such as economic openness, trade, rule of law and efficiency of domestic regulators.
Close behind in second place was Singapore, while Australia and New Zealand came in third and fourth respectively. The report said that while the global average had increased since the 2010 report, regions like sub-Saharan Africa had shown the most improvement while economic freedoms had remained steady in Europe and actually slipped in North America.
Switzerland, Canada, Ireland, Denmark the USA and Bahrain made up the remainder of the top 10. Mainland China came in at 135th, and Cuba, Zimbabwe and North Korea were unsurprising finishers at the bottom.
source & article: AFP via Channel NewsAsia
Effective administration, business friendly tax regimes and openness to trade have placed Hong Kong and Singapore as the top two Asia-Pacific economies for investors, according to a new cross-industry survey of executives.
18 regional economies were ranked by Singapore-based consultants Vriens & Partners Pte. 100 executives from major sectors like telecommunications, energy, resources and consumer goods said the two city-states’ openness and communication in business made them the most favorable destinations for trade and investment. Rule of law, government quality, low levels of corruption and fiscal/monetary administration were also important factors.
Tiny Singapore, ranked second on the list after Hong Kong, is due to become Southeast Asia’s largest economy by GDP this year, rising a whopping 15% to US$277 billion. Malaysia, though now #2, also grew 7% to $270 billion. Foreign capital continues to flow into both countries, with the survey saying this is likely to continue.
source & article: PropertyGuru via Yahoo Singapore
A HSBC report has revealed Hong Kong’s wealthiest residents are better off on average than those in Singapore or mainland China.
The report, which surveyed around 2000 well-off individuals aged 18-65 in seven Asian countries, found that Hong Kongers have liquid assets of US$301,289. That’s 40% higher than Singapore ($183,145) and 58% more than the rest of China ($126,537). Mainland China’s wealthy, however, are much younger with an average age of 36 (compared to 44 in Singapore and 48 in Hong Kong).
Young Asians are making the most of equities, usually in local markets. Chinese spent an average $547,739 on equities in 2009, compared to Hong Kong’s $220,795. Rich Hong Kongers keep about a third of their liquid assets in equities, the report noted.
source & article: blogs.wsj.com
Malaysia has ranked 59th out of 179 countries in the latest Index of Economic Freedom report by the US-based Heritage Foundation and the Wall Street Journal. While this is not particularly high on the surface, it remains above the worldwide average and 9th out of 41 countries in the Asia Pacific region. Recent economic reforms saw Malaysia improve in four of the 10 economic freedoms defined in the report, and increase its overall score by 0.2 points for a total of 64.8. Its highest ranking was 84.3 for fiscal freedom and lowest was 30.0 for investment freedom. The report singled out Malaysia’s labor and tax policies for praise, and noted that the local finance industry had weathered the Global Financial Crisis well.
Top ranked in both the world and Asia-Pacific once again were Hong Kong (89.7) Singapore (86.1) and Australia (82.6). The Heritage Foundation claims a direct correlation between countries’ rankings on the Economic Freedom Index and their per capita wealth. The full index appears on the Heritage Foundation’s site, and Wikipedia’s background on the history, critera and criticisms of the Index is here.
source & article: Business Times
Singapore is the cheapest major financial center in which to rent office space, according to a study, making the city-state more attractive to business start-ups.
The study, published by consultants Colliers International, put Singapore’s average annual office rent at US$53.71 (S$75) per square foot, far below nearby Hong Kong at US$161.14 ($225).
Though the pace has slowed recently, Singapore’s office rental costs have continued to decrease. The first stage of the new Marina Bay Financial Centre (1.6 million square feet) is already fully leased, and another 6 million square feet of space is planned for the Central Business District.
Although Singapore’s position on the list was 24th most expensive, it remains cheaper than any other city regarded as a major financial center. The top three positions were filled by Hong Kong, Tokyo, and London’s West End.
article & source: channelnewsasia.com