Singapore represents the gateway to Asia, not least because the airport is a key in-transit destination for flights to the region. As such, the tiny country has modeled itself as an international conference center and built up the appropriate hotels and facilities to support that role.
Singapore also aspires to being seen as the region’s key financial center. Yet it pales in comparison to Japan and Hong Kong. The government’s claim that the city is snapping at the heels of Hong Kong remains far-fetched. It has certainly made some inroads of late – due primarily to the uncertainty surrounding its northern competitor – but few would place it in the same category as China’s new treasure.
Still, there are some significant funds under management in Singapore, both by local institutions and by many UK houses which locate their Asian fund management operations there. Some discrepancy exists over the actual figures, though. The latest report from the Monetary Authority of Singapore suggests a total of $83.3 bn under management in the center with around $57.8 bn going in the direction of equity investment. Technimetrics is more conservative, arguing that the equity figure is more like $32 bn.
One thing is clear: the bulk of the equity funds are directed towards Asian stocks, with only a very small percentage left over for European and North American companies. The Monetary Authority tallies it up as just over $2 bn going into European companies and $0.7 bn into the US. Technimetrics veers in the other direction, claiming that US equities benefit from around $2.4 bn leaving just $1.8 bn for European stocks.
The differences here are marginal, and probably immaterial. A conservative estimate says that at least 80 percent of equity investment in Singapore is heading in the direction of regional companies. Realistically, companies from other regions are only likely to pick up investors in Singapore if they are leading blue chips (usually with operations in the region, too) or slightly lower level companies which are extremely persistent (and have Asian operations and have a local listing). The important thing to attract the attention of the institutions is the profile of the company’s operations in Asia; a local listing comes as a secondary concern.
Global Outlook
The situation could be changing. Shiv Tenaja, personal finance editor at The Business Times, points out the race is on for local institutions to start offering more global investment opportunities to both their institutional and retail customers. He notes that six months ago there wasn’t a single global fund in Singapore but now they are being launched nearly every week. ‘There’ll be at least ten of them by Christmas,’ he believes. ‘These funds are raising significant amounts of money. We’re having to look at diversification because Asia’s not going to be the great story it’s been in recent years for the rest of our lives.’
Indeed, the recent collapse of Asian markets has woken many local managers up to the need to offer something different to their clients. Even so, many of the funds will be managed by western institutions in the UK or US. For example, UOB Asset Management’s recent launch of a United Global Technology fund has been sourced out to Robertson Stephens Investment Management in San Francisco. Some 80 percent of the assets will be directed towards the American and European technology markets – but you would be better off visiting the west coast of the US than Singapore in order to attract investment.
Despite this, Tenaja stresses that even though assets are often being managed elsewhere it may still be worth companies dropping in to see the Singapore-based investment heads. ‘There’s still someone in Singapore keeping an eye on it. If you’re coming to Asia there’s no harm in stopping off in Singapore.’
No harm, maybe, but few IROs want to waste valuable time visiting funds which are just not interested in their stock. And the time concern is increased if the CEO and CFO are in tow. Most suggest a different strategy according to where operations are located. If your company is based in the region then a two-day stop-off is warranted – you’ll need to do the tour of all the major local institutions as well as the foreign asset managers which have their eye on Asia from a Singapore base. European and North American companies would do better to concentrate their efforts in a one-day visit to the leading local institutions. You’ve got to get used to some acronyms, here. The ones to consider are GSIC, Temasek, DBS, OCBC, OUB and UOB.
Government Giant
The weight of the locally-based institutions is dominated by the gigantic Government of Singapore Investment Corporation. Curtis Schenck, managing director of the Tokyo office of New York-based IR agency GA Kraut Company, says the size of GSIC is the key reason for bringing many of his US clients to Singapore.
It’s a fairly secretive organization which goes hand-in-hand with the way other government bodies are run in Singapore. The true level of equity funds under management at GSIC remains something of a mystery, for example. But it undoubtedly has money to play with: big time for Asian stocks and enough left over for some sizeable stakes in companies from other regions. Although smaller, Temasek, another government-linked institution, should also be high on anyone’s target list.
Asian companies have a wealth of UK and US institutions to consider, too, some of which take a key role in local investment. Firms like Aberdeen Asset Management, Schroder Investment Management, Morgan Stanley and Bankers Trust are all important. Many of Asia’s large institutions also manage significant funds from the city – Nomura and HSBC to name just two.
‘Most people running big pots of money here have an Asian bias,’ confirms Hugh Young, investment manager at Aberdeen Asset Management. ‘It’s the eyes and ears for the region.’ Young suggests companies looking to target that money should follow some simple rules. Making sure you’ve got the right ‘introducer’ is key to gaining attention – going through a reputable stockbroker with good contacts in Singapore is probably the best route. ‘You need a good oiler of the wheels. A stockbroker tends to be better than a PR firm,’ he adds.
Presentations should start with a very simple what do we do approach if you’re hitting town for the first time. If there’s a local competitor, highlight any similarities and differences. ‘You need to give a broad brush feel in a presentation and save the serious stuff for the one-on-ones,’ Young says. He favors meetings between 10am and noon: ‘Simply because we have a loss of interface with the UK at that time.’
Lee Tiong Seng, managing director of Bankers Trust Funds Management in Singapore, believes it’s important to cut to the chaff. ‘Get to the point quickly,’ he says. ‘That’s how we’ve grown up,’ noting that efficiency is part of the national psyche.
IR Health Check
Singapore is a bit of an IR desert as far as the needs of local companies go, perhaps due to the secretive nature of government. And the lack of focused IR clients in the country means there is also a dearth of good IR consultants for those visiting from abroad.
There’s no shortage of those on the ground purporting to be offering IR, although it’s closer in practice to financial PR. That’s valuable, however, because the financial media plays a key role in generating interest in any foreign stocks.
Regionally-focused advisors include Scotchbrook Communications and Forrest International. The bigger international firms such as Burson-Marsteller, Gavin Anderson and Edelman also have operations here. And Dewe Rogerson regularly flies people in to accompany clients from its base in Hong Kong. The message is to choose carefully if you want true IR expertise on the ground: only a few of the consultants really know what they are talking about in IR terms. The warning applies in some cases irrespective of whether or not the firm is part of a wider network.
One advisor suggested that a roadshow presentation to an audience of up to 1,000 was feasible and implied it could be worthwhile. But even a cursory glance at the Singapore investment community would tell you that such a mighty audience would include a plethora of lunching free-loaders with no real interest in your stock. Even for a major Asian blue chip.
Cultural Tips
As with most markets, on-the-ground consultancy is invaluable for roadshow logistics, building interest via the press before arrival and advising on local cultural approaches. Chris Salt, a director at Gavin Anderson, believes a good press campaign in the lead-up to targeting the Singapore investment community can work wonders, particularly if yours is a relatively unknown story. ‘Don’t descend suddenly with a roadshow,’ he says. ‘Do at least two months of media awareness before you arrive.’
Margie Warbrick, managing director at Edelman, agrees and says a new prospect in town has to expect to start from the very basics. ‘Don’t expect your audience to understand who you are,’ she says. ‘Say who you are, what you do and then go on the nitty-gritty.’ She adds that it’s worth being aware of the religious sensibilities of your audience if you are offering them lunch tied in with a presentation. Tan Peck Wha, managing director of Burson-Marsteller, advises ensuring the cuisine is not too fussy or with too many courses, which can interfere with the flow of a lunchtime presentation.
Indeed, such presentations certainly remain popular. Sing-apore is big on eating and has the restaurants and cuisine to match. The Raffles and Westin Stamford hotels seem to be the most popular destinations for the financial community, but any leading hotel fairly close to the small Raffles Place/ Shenton Way financial district is fine.
Marina Square hotels are becoming more popular as they are directly between Raffles Place and the new Suntec City development to which some institutions, such as Bankers Trust, have relocated. Orchard Road hotels are out of favor with much of the investment community on the grounds of distance.
One-on-ones are generally held in the offices of the institutions and a decent number can be fitted into one day because of the close proximity of most of the institution’s offices. Adrian Dolin, a partner at IR agency Orient Capital in Sydney, says this is one reason why Singapore is a good roadshow destination. It’s just a short hop in the heat to the air-conditioned relief of another meeting.
That leads to a final warning. Singapore is just 80 km from the equator and has an average 85 percent humidity year round. Leave your jacket behind.
Top 15 Cities by Total Equities Under Management
- DBS Asset Management
- Government of Singapore Investment Corp
- HSBC Asset Management Singapore
- Indosuez Asset Management
- LGT Asset Management
- Morgan Grenfell Investment Management
- Morgan Stanley Asset Management
- Nomura Asset Management
- Nomura Capital Management
- OCBC Asset Management
- OUB Asset Management
- Prudential Portfolio Managers
- Schroder Investment Management
- Temasek Holdings
- UOB Asset Management
Source: Technimetrics Inc
Tourist InformationWhere to StayMarina Mandarin
6 Raffles Boulevard, Marina Square, Singapore 039594
Tel: +65 338 3388
Fax: +65 339 4977
Oriental Hotel 5 Raffles Avenue,
Marina Square, Singapore 039797
Tel: +65 338 0066
Fax: +65 339 9537
Raffles Hotel
1 Beach Road, Singapore 188719
Tel: +65 337 1886
Fax: +65 334 4550
Ritz-Carlton
7 Raffles Avenue, Marina Square, Singapore 039799
Tel: +65 337 8888
Fax: +65 338 0001
Westin Stamford
2 Stamford Road, Singapore 178882
Tel: +65 338 8585
Fax: +65 338 2862
Where to Present
All of the above hotels are within easy reach of the business district and are regularly used for company presentations. For much larger presentations (not likely on a roadshow) consider:
Singapore International Convention & Exhibition Centre
1 Raffles Boulevard,
Suntec City, Singapore 039593
Tel: +65 337 2888
Fax: +65 431 2222
Where to Eat
Again, the leading hotels are favored for business meals, most of which can provide private dining rooms.
Compass Rose Restaurant
Level 70, Westin Stamford
Tel: +65 431 6156
Continental cuisine
Empress Room, Raffles Hotel
Tel: +65 337 1886
Cantonese cuisine
Ristorante Bologna, Marina Mandarin
Tel: +65 338 3388
Modern Italian
Summer Pavilion, Ritz-Carlton
Tel: +65 337 8888
Cantonese cuisine
Where to GoNational Museum
140 Hill Street, 01-00, Singapore
Tel: +65 338 0000
Fax: +65 332 3587
History of Singapore in a beautiful domed building
Singapore Art Museum
71 Bras Basah Road, Singapore
Tel: +65 338 0000
Fax: +65 332 3218
Shopping
The shops are an institution in Singapore. Orchard Road is the main area to visit
