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Singapore asset managers upbeat on global growth, see stronger local dollar

Half of the 58 respondents in the 2021 survey see the US economy grow more than 4% this year, stronger than the 3% forecast by the International Monetary Fund’s in October
By Goh Thean Eu   
January 14, 2021

Singapore asset managers expect growth in the US and other developed economies to bounce back from the coronavirus-triggered slump now that vaccines against the virus have begun to be rolled out, and predict the local dollar will strengthen against the greenback this year, according to findings from the Investment Management Association of Singapore’s (IMAS) annual poll.

Half of the 58 respondents in the 2021 survey see the US economy grow more than 4% this year, stronger than the 3% forecast by the International Monetary Fund in October.

Their predictions of over 5.5% growth for Europe and over 3% for Japan are also higher than the IMF’s forecasts of 5.2% and 2.3%, respectively.

Two-thirds of respondents expect the US dollar to fall more than 5% against the Singapore dollar this year.

Most respondents in the survey, which was conducted in December, are C-level executives of fund management firms based in Singapore.

The rollout of vaccines has “revived the global economy, and instilled greater confidence among investors who were reluctant to invest during the pandemic”, IMAS Chairman Susan Soh says in a statement on January 13.

Singapore asset managers are also optimistic that ties between the US and China will improve under the administration of US President-elect Joe Biden, who will be sworn in on January 20.

“Besides the pandemic, fund managers in Singapore have also been most concerned about US-China tensions. While the upcoming change in administration in the US should provide some comfort, it will still remain a source of concern – though markedly less than in previous years,” Soh says.

Survey respondents see weak margins and poor returns in actively-managed funds versus passive funds as two of the biggest threats to the global fund management industry’s growth this year.

IMAS, established in 1997, comprises over 100 investment management companies in Singapore with S$1.3 trillion (US$962.3 billion) combined assets under management.