Investment opportunities abound amid thriving capital markets in region

Published Sun, Jun 13, 2021 · 09:50 PM

Singapore

MORE deal participants are drawn to the mergers and acquisitions trail here, amid thriving capital markets in the region.

Citic Securities operates in Singapore through its wholly-owned subsidiary CLSA. Acquired by Citic Securities in 2013, CLSA had established a branch in Singapore in 1987, offering services such as equity financing, debt financing, and M&A consulting for the last 34 years. It was the underwriter for a number of high-profile transactions including the initial public offerings of Sea Group in 2017 and Nanofilm Technologies in 2020.

CLSA has branches in Malaysia, Thailand, Indonesia, and the Philippines. A CLSA spokesperson said countries in South-east Asia use different languages, and have varying political conditions and business environments. In Thailand, for example, debt financing costs less while Singapore has a more mature equity financing market, and each market requires its own tailored strategy.

The Singapore branch of CLSA will continue to mine pan-regional opportunities between Singapore, Southeast Asia, and China, while also continuing to develop derivatives, fixed-income products, equity and debt financing, and other services, to seize the new opportunities that would come with closer cooperation between the Singapore Exchange and the two exchanges in Shanghai and Shenzhen.

Investors from Singapore and the region - especially the younger generation - are Internet-savvy. Coupled with the pandemic, which led to an accelerated digitalisation wave, the ground was sweet for the entry of fintech players. Tiger Brokers and Futu are two such companies that have launched digital investment platforms in Singapore.

Eng Thiam Choon, CEO of Tiger Brokers Singapore, pointed out that Singapore's digital economy holds huge potential, with the number of active users growing continuously since the launch of Tiger's platform in February last year. The company saw transaction volume in the third quarter of last year grow 540 per cent over the previous quarter. Mr Eng noted that 30 per cent of local customers comprises Gen Z investors.

Futu's online investment platform, moomoo, was launched in Singapore in February this year. Gavin Chia, director of Futu Singapore, said there was a growing number of "digital natives", users who are comfortable with Internet and technology from an early stage. Futu saw the number of its fee-paying customers grow seven-fold in the first quarter of 2021, with 70 per cent of the new customers hailing from Singapore, Hong Kong, and the US.

Mr Chia said the young generation of investors enjoy sharing their insights, which explains why platforms that feature investors' discussion forums are popular.

Lu International, a unit of China's Ping An Group, was registered in Singapore four years ago and launched its online wealth management platform Lu Global in 2018. Lu Global and Thailand's Kasikornbank have also teamed up to launch FinVest, an online investment platform, in November last year.

Joanna Tang, CEO of Lu Global, said the company is planning to bring in investment and financial planning products from China and offer them to investors through the variable capital company (VCC) structure.

Launched by the Monetary Authority of Singapore in January last year, a VCC can be made up of a single fund, or two or more funds, with separate holdings of assets and liabilities, which provides greater flexibility in the management of assets and risks.

Hu Yuanwen is SPH Chinese Media Group NewsHub's associate business editor. This article is part of a collaboration on a series of weekly features translated from Lianhe Zaobao. The original story first appeared on June 6. The next package on June 21 will take a look at the China+1 supply chain strategy.

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