As Singapore’s Grand Prix roared with a sold-out crowd of 270,000, another significant event unfolded in the world of finance. The US Federal Reserve delivered a 50 basis point interest rate cut, signaling the start of an anticipated economic downcycle. Managed with precision, the move was intended to stay ahead of the curve, suggesting a soft landing for the US economy.
This rate cut, a much-discussed topic at the Wealth Management Institute’s Global Family Office Summit, the Milken Institute’s Asia Summit, and Token2049, was met with mixed reactions. Conversations on the subject are set to continue across upcoming private equity conferences such as SuperReturn and Business China.
Muted Markets Amid Optimism
Despite the long-anticipated rate cut, equity markets remained muted. Some viewed this as a classic “sell on news” scenario. The Straits Times Index (STI) closed at 3,624 points after crossing the 3,600 mark, and the REIT index rallied by nearly 5% to 7% during the preceding week.
Yet, technical indicators suggest caution. The STI experienced a significant 426-point rise from its summer low in August, gaining 13%. This climb hit the highs of November 2007, the period right before the Global Financial Crisis. Now, as bulls eye a target of 3,800 and the all-time high of 3,870, there’s cautious optimism about the STI’s future.
Chew Sutat, a well-known figure in the financial world, reflected on these market movements, noting that while the capital markets are gaining strength, investors must remain vigilant.
A Growing Ecosystem
Venture capital is one area in which Singapore has excelled. During a fireside chat with Lee Chuan Teck, executive chairman of Enterprise Singapore, and Hsieh Fu Hua, former CEO of the Singapore Exchange, the country’s entrepreneurial spirit was discussed in depth. Singapore boasts 25,300 startups, with a 10% increase in new companies incorporated in 2024. This success has catapulted the city-state to fifth place globally in Bloomberg’s Global Startup Ecosystem ranking, with a valuation of US$144 billion.
Despite this growth, Chew pointed out that the capital markets here are not as robustly supported by public savings or private investments as one might expect. “The supply of capital is there,” he remarked, “but we just need to point some demand in the right direction.”
The Next Lap
The capital market landscape in Singapore has certainly evolved. During the 25th-anniversary celebrations of the Securities Investors Association Singapore (Sias), founded by David Gerald, conversations about market growth took centre stage.
Gerald has long advocated for investor education, having co-founded Sias to help investors during the Asian Financial Crisis. Chew, reflecting on Singapore’s progress, acknowledged that while the marketplace has matured, challenges remain. Investors must take responsibility for their decisions, particularly in a market as dynamic as Singapore’s.
A Global Perspective
Chew also highlighted the international opportunities for Singapore-based companies, many of which have adopted a global strategy. Regional giants like ByteDance and Shein have begun positioning themselves as international companies with Singapore as their base, and there are rumors that both are seeking a listing on the London Stock Exchange.
As Chew prepares for his next venture—a fundraising climb of Mount Fuji and Mount Akadake—he remains optimistic about the future. His efforts to raise funds for low-income families and children with special needs have already garnered over $100,000 in donations.
With an eye on the upcoming quarter, Chew’s message is clear: while the party in the capital markets continues, the journey requires both caution and a sense of responsibility. As he embarks on his climb, he leaves behind a financial community ready to tackle the challenges of the final quarter of 2024.