Asia Pacific Update: April 15
In today’s edition
In today’s edition, we look at how consumers and companies in the Asia Pacific are negotiating the shifts in investment, wealth management, and personal finance solutions.
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Recovery Spotlight: Personal Finance & Wealth Management
Consumption and spending patterns may be improving in some countries but many consumers continue to question how they should manage their personal debt, savings, wealth, and retirement funds in an uncertain world.
With people staying in, traveling less, and working from home, some finance experts believe the pandemic-driven reduction in consumer spending makes this a great time for many to build up wealth. Recent months have further cemented what private bankers have long believed; that the Asia Pacific wealth market is set to outstrip other developed markets in both growth of assets under management and profitability.
Whilst the pandemic has crippled business activity, most private banks in Singapore continue to report growth in assets under management and net new inflows, helped by wealthy clients’ wholehearted embrace of digital services. The wealth management business will continue to be a key growth driver for the Singapore-listed banks, and puts the country’s top three banks in good stead as rising rates are expected to provide a much-needed boost to interest income.
In Hong Kong SAR, banks looking to capitalise on wealth management opportunities from China’s Greater Bay Area will have to wait until travel bans are lifted. The Hong Kong Monetary Authority says existing travel bans make it difficult to launch the ‘Wealth Management Connect’ scheme – a cross-border channel that will allow mainland residents of the 11-city cluster to invest in Hong Kong SAR and Macau-based wealth management products.
Increasingly, investors are putting the environmental and social profile of asset and wealth management firms on a level playing field with financial return. A growing number of investors expect these firms to make environmental, sustainability and governance issues integral to their investment strategies. This shift is already having a significant impact on product design, fund allocation, and performance objectives.
The pandemic having curtailed face-to-face meetings, Asia Pacific banks equipped with sophisticated digital services have been coming out on top.
A study by Oracle found growing confidence among consumers and business leaders that robots handle finance tasks better than people. The study of more than 2,500 consumers and business leaders in Australia, China, India, Japan, and Singapore found the pandemic had changed who (and what) they trust to manage their finances. Amid financial anxiety brought on by the economic slowdown, the study found around 68 per cent of APAC consumers trust a robot more than themselves to manage finances; three-quarters (76%) said they trusted robots over personal financial advisers.
In the Philippines, the financial services sector has been one of the key industries to register growth since the pandemic. With a penetration rate of less than 10%, companies are prioritising new products and programmes to be more responsive to individual client needs and an overall embrace of digital strategies to connect with stakeholders.
Robo-advisers take over
In Taiwan, one in four investors in their twenties now holds an investment product similar to an Exchange Traded Fund (ETF); often used by robo-advisers. ETFs have seen a dramatic surge in popularity in Taiwan over the past year, according to data from the Taiwan Depository and Clearing Corporation Show. By the end of 2020, more than 15% of registered investors in Taiwan, or close to 1m people, owned ETF products. The size of the island’s onshore ETF market swelled by 135% in the two years to the end of 2020 to NT$1.7tn ($60.1bn) and experts believe 2021 will see an ongoing uptick.
Despite starting from a modest base, Vietnam’s wealth management market is growing, encouraged by regulatory changes, increasing expertise, and drive of local professionals, rising private wealth across all segments. Many retail banks and securities firms are upgrading and enhancing their platforms and propositions.
Overall, Vietnam’s stock market is seeing strong growth and is on track to become bigger than the Philippines in terms of market capitalisation by mid-2021.Together, Southeast Asia’s ten markets make up the world’s fifth largest economy – with a multi-trillion US dollar portfolio of assets under management.
Last month marked a year since the world’s equity markets hit their pandemic lows as investors faced immense uncertainty over COVID-19. Over the past year, stock markets have undergone a strong recovery – adding trillions of dollars to global equities and attracting an army of retail investors. Against this backdrop, there is a growing global expectation that the wealthy should contribute more to societies and their economies.
Media analysis of stories covering Australia, Cambodia, Hong Kong SAR, Japan, Malaysia, Macau SAR, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam from 15 March to 15 April 2021.
This briefing was prepared by the Weber Shandwick Insight and Intelligence team in Singapore. If you feel a specialised briefing and analysis bulletin could benefit your team, please get in touch: email@example.com.
About COVID-19 Recovery Report:
- The views and opinions reflected by these headlines do not necessarily represent those of Weber Shandwiick.
- The content of this news bulletin is a summary of publicly available news articles on events and developments related to COVID-19