Singapore

Singapore’s investment company has been increasing its investments in China over the years.

Macquarie Securities' Ismael Pili and HSBC’s Noel Quinn reveal their outlook for the Asian market in 2012.

So what are we looking for? 1. Length. Your column doesn't need to be long - 300 words is enough, 600 is ideal. Keep it brief.

It is easy to see how individual investors can be confused and anxious recently because of the Euro-zone crisis – and many will be wondering what to do next. In a buoyant market confidence runs high and most people feel they can take higher risks and expect higher than average returns. But when, like now, the markets are volatile, investors tend to take the other extreme position and stay in cash or bonds. But the greatest advice at times like these is to adhere to your investment strategy (as long as it is a sound one) even if it makes you feel uncomfortable. But, in times of market turbulence this advice is rarely adhered to and we see investors making the same common mistakes time and time again. Here are the top three: 1. We tend to ‘follow the herd’ and seek safety in numbers. This type of investor behavior means we are easily affected by all media noise which blinds us against making rational investment decisions. 2. The pain we feel when we take a financial loss is twice as large as the joy we feel from a financial win. We are programmed so that a short term loss means more emotionally to us than the ability to appreciate the medium or long-term wins, which directly impacts our investing behavior. 3. We confuse price for value. If the markets are at a discount, shouldn’t that be a good time to be buying quality stocks? Hence, if you recognize that we succumb to the above pitfalls - then you know we need to be smarter in order to catch the market edge – we need to look beyond the doom and gloom of market volatility. When the going is good, most people are not averse to engaging in risk concentrated activities such as emerging markets or commodities. But it makes sense to have your portfolio founded on a well diversified investment strategy – no matter what is going on in the markets. You can reduce the impact of market movements by diversifying your portfolio and by doing this you reduce your risk. There are a number of ways to diversify within your portfolio, for example you can diversify across the four different asset classes: shares, cash, property and bonds. You can diversify within the asset classes themselves, for example purchasing shares in companies that operate in different industries such as mining and banking retail etc. You can also diversify across countries which will reduce your exposure to a single country and currency. Managed funds are a good way to help provide you with an easy route to diversification. To survive in volatile times (and even profit from them), it is important that your portfolio has a strong framework and you have the discipline to save and invest in both good and bad times. We know it is tough to keep a balanced view of things around money in turbulent times and a financial guide with a compatible philosophy can help to keep you grounded, even when the markets are not.  

What is a Convertible Bond (CB)? CBs are hybrid instruments combining a corporate bond and a buy option on the underlying share. They thus offer the best of both worlds: their equity component allows investors to participate in market upswings, while their bond component offers a protective buffer. Their performance is dictated by credit spreads and the performance of the underlying share. These traits have made this asset class the object of increasing interest, as reflected by the major inflows into dedicated directional funds over the past three years. A special dynamism is evident in the Asian CBs market – the only market of any discernible size among the emerging regions, with USD 20 billion of new issues this year as of November 30th 2011 (48% of 2011 total number of issues / 28% of the total volume). Attraction of Asian CB market? Ø Play Growth While Europe’s future remains uncertain and growth in the US is only gradually recovering, the emerging nations, although not immune to the global slowdown, are still growing healthily. Traditionally regarded as export-oriented economies, the countries of the Asia-Pacific region are establishing themselves as major drivers of global growth by virtue of their size and the pace of progression in their consumption and GDP. Ø Look for asymmetry Against this backdrop, CBs are a smart way for investors to expose themselves to Asian growth, enabling them to benefit considerably from equity market rallies with a “parachute” effect in the event of a decline. They offer an attractive rate of return (superior to their European or US counterparts for the same credit rating) and inexpensive options: the average options of Asian CBs today look cheap. It is worth mentioning that equity sensitivity is quite low in the universe at present. Lower deltas mean the credit component is stronger. Furthermore, it reacts with more volatility for a higher beta region. Ø Dynamism and Diversification With capitalization totalling USD 78 billion (according to UBS), the Asian CB market consists of about 600 securities and constitutes a dynamic and diversified market in which all sectors and major economies of the region are represented. However, roughly half of the pool is issued by Chinese and Indian companies. Even if nowadays about 60% of the pool is listed in USD, we are seeing an increasing number of bonds issued in local currencies (HKD, SGD, AUD, KRW, CNY). Another characteristic of this market is that a large proportion of the bonds issued are not rated, even if the issuing companies are, themselves, subject to a rating (S&P, Moody’s, Fitch). The absence of a rating is not, however, an indication of poor quality. Indeed, a number of issuers are blue chip regional companies. Ø Cheapness CBs are currently attractively valued in technical terms. This is especially true for Asian CBs. The attached chart compares the price of CBs with their valuation based on a sum-of-the-parts analysis (sum of the valuation of the bond component and the option). In other words: Participate in the region’s potential without assuming all the risks CBs thus currently offer an attractive risk/return profile and serve as a useful tool for boosting the performance of diversified portfolios. By virtue of their asymmetric profile, they allow investors to take advantage of the huge potential offered by the region without being exposed to all of the risks. Source: BoA Merrill Lynch

The next generation of cross-border electronic trading is gaining strong traction over the past few years in the global financial markets. Ironically, in some Asian markets, it can take seconds to execute an equities order. For algorithmic traders who use sophisticated algorithms to trade thousands of shares in mere milliseconds, any slowdown in the transactions can mean loss instead of profit. The spilt second is where traders’ enormous opportunities lie.In other words, slow trading speedscan be seen asthe result of hidden transaction costs. Yet, if financial institutions can deliver high speed capabilities while keeping costs down, they can gain a valuable competitive edge while elevating their game. High Frequency Trading (HFT) involves the use of computerized algorithms to generate short-term trading signals with a very short risk-holding period.In 2010, HFT accounts for 70% of the turnover of equity markets and over 50% of U.S. equity trade volume. In Asia, HFT drives 40% of market trading activity in Tokyo and around 10% to 30% in Asia Pacific. So what has been holding Asia’s financial markets back over the past few years? State regulations, opposition from entrenched interests and the lack of critical IT infrastructure are some of the key reasons. The current IT infrastructure of many financial exchanges and financial service institutions in Asia is to be enhanced to meet the anticipated demands for micro-second transactions.Many Asian financial institutions are wising up to this fact – local and regional investors, hedge fund managers and investment banks are exploring all possible means to step up for the IT arms race. Now, IT infrastructure has been widely regarded as a necessity to capture this spilt second advantage and compete with its peers. For most algorithmic traders, HFT means the need for high performance for cross-border electronic transactions. How can financial institutions improve their connections to key Asian financial markets? This calls for a new generation of sophisticated Financial Data Centres that provides proximity advantages and ultra-low latency solution. Proximity advantages, as the name suggested, means proximity to the financial exchange. In Hong Kong, for instance, the first Financial Data Centre, to be completed in 2013, is built next to the Hong Kong Exchange’s next generation data centre in Tseung Kwan O.This physical proximity of the trading systems will significantly matter on the latency networks.

Islamic Risk Management standards aim at enhancing and improving the current standards in the shariah compliant banking industry.

Everyone working within financial services agrees that the number and frequency of new regulations is increasing dramatically, resulting in a significant diversion of management attention and resources without improving operational effectiveness or firm performance.

CIMB Group will introduce new Islamic products in Indonesia and Singapore this year through its Islamic units in the two countries.

So loan growths are expected to moderate significantly in 2H12, but which bank remains a relative outperformer in uncertain times?

Guess who DBS selected as dealers under the programme?

This is Teradata’s first partner bid with Microgen.

And the outlooks on 79% of the banks in the region are stable under the new criteria.

Find out what Asia’s heads of business banking including HSBC’s Noel Quinn, UOB’s Eric Tham and Macquarie Securities' Ismael Pili have to say about the EU crisis and Asia’s banks.

The lender aims to take advantage of yuan's rise to become major offshore trader of the currency.

OCBC Bank launched of its new S$20 million account opening system at all 56 OCBC Bank branches in Singapore.