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Investment trends to watch out for in 2021

How can traditional industries leverage the latest technology to meet the changing demands of consumers? The recent NUSS economy investment forum discussed Singapore’s market outlook and which new market trends investors should keep an eye on.

The ‘New Economy Investment Forum’, that was held on 9 June 2021, was a joint webinar organised by the NUSS Intellectual Pursuit & Lifelong Learning Sub-Committee and NUSS Business Connect. The webinar attracted over 90 participants who attended via Zoom platform.

Kicking off the event was Mr Soh Yi Da, Chairperson of the NUSS Business Connect who introduced the evening’s moderator, Mr Guo Longjin, Legal Counsel for APAC at LivaNova Singapore Pte Ltd.

Mr Guo had the honour of introducing the event’s esteemed panellists Dr Davin Wang, Chief Operating Officer of Really Pte Ltd who has a PhD in Finance, and Mr Thilan Wickramasinghe, Head of Research & Head of Regional Financials at Maybank Kim Eng Singapore and Co-Founder of Create Lab.

Dr Wang began his speech by highlighting the impact of technology on investments.

Investors should keep an eye on fintech

One trend that is picking up steam is a result of the increasing popularity of digital payments. This is further driven by the growing Generation Z population who readily embraced cutting-edge technology especially in the digital payments sector. Dr Davin commented “Everything that they do is highly connected to technology.” He believed that businesses that focus on digital payments will continue to grow and prosper, and he cited specific areas such as biometric authentication, EMV (Europay, Mastercard and Visa) technology, mobile-point-of-sale (mPOS), mobile wallets, and contactless payments.

The ‘conscious consumer’ will lead the way

Dr Wang noted that the rising consumer movement for more sustainable and healthier ways of consumption can lead to a number of exciting investment opportunities in the sustainable space.

“Investors are looking for something that would really point towards very supportive or sustainable themes.”

He identified various sectors such as plant-based diets, sustainable packaging, agriculture technology (agri-tech), streaming economy, and sustainable fashion as possessing the biggest growth potential.

Healthcare technology is now in its prime

“Healthtech has already grown even before COVID-19.”

According to Dr Wang, a 2020 report by Google, Temasek and Bain showed that while healthtech usage grew four times, it has also retained its users post-lockdown. He noted that certain areas in the healthcare sector are driving forward investments in companies that specialise in robotic surgery, artificial intelligence (AI) radiology, predictive healthcare analysis, AI drug discovery, and longevity tech.

Property technology continues to lead as the world’s biggest asset class

Dr Wang quoted Forbes saying that “global real estate is the largest single asset class in the world, valued at around $230 trillion, leaving it a no-brainer that proptech innovation holds a key stake in the world’s future.” He cited a few accelerated growth areas which include cloud based real estate management, predictive real estate maintenance, real estate marketplaces, real estate AI, and automated real estate valuation.

Businesses that are thriving amidst the pandemic

He also shared six new business sectors that could gain momentum despite the pandemic. These are mostly solution-driven platforms or services such as doctor-on-demand apps, smart robot markers, remote meet-up solutions, biotech businesses, trading fintech, and streaming services.

Using blockchain to invest

Dr Wang concluded his presentation by sharing how blockchain can help people invest and participate in the new economy via the private equity market. He went through how to go about this new approach to investment and added that private equity market also gives investors the opportunity to diversify their investment portfolio as it gives them a new way to invest in addition to traditional methods such as bonds and stocks.

In the next part of the forum, Mr Wickramasinghe presented on the Singapore economy and the outlook for key sectors. Here are the highlights from his segment.

Government quite bullish on Singapore’s recovery

“The government’s budget last year saw significant amount put to pandemic control and supporting the economy. Now, the government is coming in to restructure the economy to take Singapore forward.”

Mr Wickramasinghe went on to share that Singapore is poised to deliver a 6.2% GDP growth in 2021 — slightly higher than the initial Ministry of Trade projection of 6%. However, he also noted that the trade-off of a comfortable GDP would be a higher inflation rate of about 1.3% which would be one of the highest levels seen in recent years.

Mr Wickramasinghe explained that the economy’s bullish outlook is mainly driven by Singapore’s prompt COVID-19 vaccine rollout, with almost 40% of the population receiving their first dose, as of May 2021. Because of this, Singapore is projected to be the first in Asia to achieve herd immunity.

Recovery across different industries

According to Mr Wickramasinghe, Singapore maintained a robust manufacturing sector despite the pandemic, with expected improvement in the services sector that took a nosedive during the Circuit Breaker. Other sectors that are recovering include semiconductor industry which is experiencing a boom in production and exports, and property which is driven by strong liquidity flushed into the system.

Tourism and aviation remain in the doldrums

However, sectors directly hit by the pandemic are still struggling to stay afloat.

“These are sectors are likely to take significant amount of time — even with Singapore’s vaccine rollouts — to fully return back to normal.” Among those sectors affected and experiencing sluggish recovery are tourism and aviation, mobility, retail, recreation and workplaces.

Past the worse in terms of unemployment

Referencing unemployment data, Mr Wickramasinghe explained that despite the significant job losses in the services sector, he noted that Singapore is on a reasonable trajectory in terms of employment creation.

Singapore’s inflation is at a seven-year high

According to Mr Wickramasinghe, Singapore is entering a period of inflation which is currently on a seven-year high which is expected to rise further.

“A large part of that is driven by food and energy prices — already, food prices are at 40% increase from last year.”

He believes that overall inflation will be present for a while although a part of it is transitionary as these are based on lower figures as seen last year.

Singapore’s sector outlook

Mr Wickramasinghe concluded his segment by going through the sector outlook for Singapore’s various industries in terms of overall investment positioning with banking, healthcare, land transport, and technology showing the most upside potential.

Before the forum came to a close, both panellists took time to answer questions posted by event participants in a lively Q&A session. To hear about the panellists’ responses and insights, watch the full webinar here.

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