Tense negotiations between the United States and China have
beset international markets lately, with stocks and bonds suffering as a result
of the economic upheaval emanating from the world’s two most-powerful cities.
Singapore’s bond market has remained robust and attractive amidst this
international upheaval, however, with analysts making clear note of the
city-state’s potential in recent musings.
Positively-yielding bonds are difficult to come by when
international markets are upset by political tensions, particularly if the
near-future of a particular country is called into question by a wide enough
array of investors. Singapore’s bond market has remained surprisingly strong in
recent years partially because it’s remained relatively tranquil and dependable
despite global turmoil that’s disrupted other marketplaces.
According to the Straits Times, for instance, Singapore still pays the highest
returns among economies with AAA credit ratings from all major rating agencies.
Investors are thus confident that purchasing bonds from Singapore will yield
positive results over time, whereas purchasing from other states (e.g. the
trade-war-embroiled U.S. and China) would be riskier and in some cases not
worthwhile at all. AAA credit ratings are particularly enviable because they
guarantee to outside investors that your bond market is credible, stable, and
unlikely to tank anytime soon.
Deutsch Bank recently made the case for investing in
Singapore, arguing that the diverse class of assets available for investors to
bet on renders it an ideal investment location. According to Deutsch Bank’s website, “the Singapore dollar has proven to
be less volatile in times of global financial crisis. An open financial system
and capital markets backed by strong reserves can boost investor confidence and
draw investment flows into the country.”
Given the ongoing economic turmoil
stemming from negotiations between the United States and China, it stands to
reason that the robust and stable Singapore dollar will thus appear to be a
safe bet to many international investors seeking temporary safe-havens for
their money. With a buoyant economy boosted by tourists attracted by kid friendly things to do, Singapore has a
promising outlook.
Peril has grown so elevated in recent weeks that strategists
on Wall Street are now warning about a forthcoming global recession, according to CNBC, with high volatility expected as a direct result of the tense
nature of ongoing negotiations.
Like any internationally-involved economy,
Singapore can’t totally isolate itself from volatility elsewhere, yet the
robust nature of the city-state’s bond market has inured it to sudden jolts
likely to occur in other markets. Singapore’s confidence is reflected in the
city-state’s decision to sell reopened July 2029 government debt worth roughly
$2.9 billion on Wednesday.