Market Update

Q1 2009

Q1 2009 Singapore Outlook

High levels of uncertainty amongst employers, employees, consumers, capital providers > Everybody

Already resulted in:

  • redundancies

  • blanket hiring freezes

  • delays in appointments

  • transfer of "redundant" staff from North America/Europe to Asia

Bright spots:

  • Some organisations capitalizing on situation by selectively hiring high potential individuals.

  • Some industries relatively unaffected (inelastic demand)

  • Some functions being beefed up. For example: banking risk & compliance

It could get worse:

Unfortunately, our current cycle has the possibility of becoming self reinforcing. Fear / Uncertainty > reduced demand etc.

Unprecedented accumulation of poorly understood financial assets / liabilities and the difficulties of unraveling them

Pressure on some governments to adopt populist measures notably protectionism

The good news:

This "crisis" has the potential to supply the "energy" to start addressing many long term issues including:

Regulation of financial institutions

  • The need to refocus the financial system institutions (broadly defined) on the efficient allocation of capital [and away from the short term enrichment of individuals]

Energy costs

  • In many ways the "straw that broke the camels back" … that ultimately tripped the US into recession, was commodity / energy costs

  • The combination of increased emphasis on the development of alternative energy, efficiency gains in conventional technology and possible regulatory oversight of highly leveraged speculation in resources could serve to moderate price increases even as real demand recovers


  • Vastly increased investment in break through energy related research holds out the real prospect of finding "game changing" technologies

Re-balancing of global trading

  • Obviously the US consumer could not have global trading continued to run up debt indefinitely (even assuming responsible lending practices). This crisis has the potential to stimulate the major nations to make the adjustments necessary to bring more "balance" to the international trading system


  • Basically we’re somewhat optimistic

  • Hope may well start to return by late Q2 after fiscal and monetary stimuli begin to feed through. This will be working in unison with effective stimulation from reduced commodity prices. We are looking at a mild recovery in Q3/Q4

  • As this gathers pace the frightened cash currently sitting it out may well rejoin the market fray…

  • In any event, much of Asia has the financial resources to both stimulate and re-focus their economies while waiting for the global economy to recover

Asia’s fundamental advantages of…

  • Population / Demographics

  • Often quite competent governance (China, Singapore etc)

  • Ongoing microeconomic reforms

  • Relatively early in development cycle (China etc)

…will continue to make it "the" growth region for many decades.

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