Well into the second half of 2023, elevated interest rates and geopolitical tensions continue to dampen growth in global markets, increasing fears of a recession.
Yet we also see signs of inflation easing, raising hopes that the US Federal Reserve (Fed) may soon pause or reverse its quantitative tightening (QT) policy. Furthermore, China has also eased its zero-COVID policy and tech crackdown, which may not only spur its economy but also act as a boost for global growth and travel demand.
Given the complex economic outlook, especially in the near term, gaining a greater understanding of the economic cycle and asset classes, and being able to ask questions to investment practitioners can be a boon for investors.
We can find all these, and more, at the Invest Fair 2023, a two-day physical event taking place at Suntec Conventional Hall 403, Level 4 on 12-13 August. Register now to gain free access to hear about the latest market trends and investment ideas across various assets from over 50 industry experts and finance bloggers.
Here are 4 investment trends that we will likely be able to hear more about at the Invest Fair 2023.
#1 Chinese Equities May Benefit From A Consumption-Driven Recovery In 2H 2023
Stock markets around the world experienced mixed results over 1H2023, with the US markets leading the pack. This can be attributed to the better-than-expected economic data, including a strong labour market, and corporate earnings in the US. Furthermore, the resurgence of the Artificial Intelligence (AI) theme with the introduction of ChatGPT has helped lift overall market sentiments.
On the other hand, one of the strongest markets in 2022, the Singapore market, has recently eased its gains. According to UOB’s 2H2023 Market Outlook, the Straits Times Index (STI) is trading at a fair valuation with a risk of downside due to a slowdown in global trade and persistent inflation.
Comparatively, the Chinese market has recently started showing signs of recovery after rising above its 1H2023 lows. With the easing of the zero-COVID policy stance, earnings of Chinese companies are expected to improve as the government is likely to maintain a pro-growth policy.
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If you wish to get more insights on the market outlook for 2023, be sure to attend the Invest Fair 2023 on 12 August, where industry experts like Stephen Tong (Senior Client Portfolio Manager of Franklin Templeton Investments Solutions), Sean Tan (Head of Trading at Asia Genesis Asset Management), and Geoff Howie (Market Strategist at Singapore Exchange) will be sharing their thoughts on the key market trends to take note of.
Additionally, don’t miss out on the session by Alvin Li (Director of Equity Derivatives Sales Asia at UBS AG), who will be sharing about the use of daily leverage products (DLC) to capture trading opportunities in the US, Hong Kong, and Singapore stock markets.
#2 Lock In The High Yields On Investment Grade Bonds As We Near The Rate Hike Cycle
The rise in interest rates has made fixed income, or bonds like Singapore Savings Bond (SSB) and Treasury Bills (T-bills), a popular asset class in 2023. The latest interest rate hike by the US Fed in July is the 11th round since March 2022, which has seen interest rates climb from 0-0.25% to 5.25–5.50%.
Bonds are typically preferred during the slowdown and contraction phases of an economic cycle due to their high yields. They also tend to outperform stocks during these times, as can be observed in the chart below, which plots periods of market downturns.
It is generally assumed that the Fed may pause for the rest of 2023, and even reverse its quantitative tightening policy stance in 2024, depending on the economic landscape. As such, it could make sense to lock in the higher yields in short-term bonds as we near the rate hike cycle and as interest rates top out.
According to OCBC Premier Banking, it suggests investors adopt a barbell strategy in terms of duration, as short-term bonds offer attractive carry opportunities due to the high yields, while long-term bonds offer potential capital appreciation and protection against recession. Furthermore, it maintains a preference for investment-grade (IG) bonds and remains selective for High-Yield bonds within Asia.
Beyond the main stage talks at Invest Fair 2023, which are generally macro-focused, there are also other side stage talks that are more cater to individual investors starting their investment journey, such as “How To Find High Dividend Stocks In The Market?”, “How To Maximise Your CPF For Best Returns”, and “A Simple Hack To Identifying Good Stocks For Trading.”
While these talks may suit beginner-level investors, more experienced investors could also pick up new investing ideas or trading techniques from local financial bloggers. So be sure to check out the programme list to pick out the talks that interest you the most at the two-day event to get the best value.
#3 Peaking Interest Rates Tend To Be Positive For Industrial REITs
The Real Estate Investment Trusts (REITs) sector was heavily affected in 2022 due to rising inflation and interest rates declining by around 5% to 25%. However, the sector has seen a tentative recovery in 1H2023, with the REIT benchmark indices FTSE ST REIT Index and iEdge S-REIT Index increasing marginally by 1.6% and 2.1% (as of 30 June 2023) YTD, respectively.
The slowdown in the pace of rate hikes is a boost to the S-REITs market, which has the highest yields of 8.1% compared to other asset classes such as STI Index (5.0%) and MAS Benchmark Government 10-Year Bond (3.0%). UOB Asset Management (UOBAM) expects the peaking interest rates to be positive for Industrial REITs in the Asia-Pacific (APAC). On the other hand, OCBC Premier Banking believes there’s value in REITs with exposure to the Japanese real estate market due to the positive yield-spread as a result of low borrowing costs.
For more insights on S-REITs, attend the Invest Fair 2023 to hear from REIT Specialist Kenny Loh on whether the S-REITs are overvalued, Deputy Chief Investment Officer at Phillip Capital, Tan Teck Leng, on investing for yield through REITs and Money Market Funds, or from financial blogger Lim Jun Yuan, who will share his criteria for selecting good REITs to invest in.
#4 Gold May See Upside Amid Heightened Fears Of A Recession And Geopolitical Risks
One of the stronger currencies in 2022, the US dollar, is expected to see limited upside in 2023 and may even drift lower into 2Q2024 as the QT comes to an end, according to UOB’s 2H2023 Market Outlook report.
You can better position your portfolio by understanding “How Investors Can Learn To Navigate The Ever-Increasing Volatile Markets” – a main-stage talk on 13 August.
Another keenly monitored commodity – crude oil – also faces limited upside potential due to lower global demand as economic growth slows. This has led to OCBC lowering its 12-month Brent oil forecast to US$85/barrel from US$92/barrel.
On the other hand, both UOB and OCBC expect Gold to perform positively in the medium term as interest rates are lowered amid heightened recessionary fears and the US dollar weakens by early 2024.
In addition to commodities and currencies, get more insights on alternative investments like cryptocurrency and web3 trends at the Invest Fair 2023 from speakers from Bitstamp, Coinlive, and Coinvestor.
Attend And Win Attractive Prizes At The Invest Fair 2023
On top of around 35 seminars and panel discussions from over 50 speakers on the main and side stages, engage in interactive activities and games to win attractive lucky draw prizes. What’s more, the top 5 finalists of the Active Trading Tournament 2023 will be sharing how they achieved their astounding results, and who knows, you may pick up one or two tips to refine your trading strategies as well.
Register today for Invest Fair 2023 happening on 12-13 August at Suntec Exhibition Hall 403 and learn how to grow your wealth with confidence across various asset classes beyond stock and securities, such as cryptocurrency, wealth management, property, and other alternative investments.
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