We’re coming to the tail end of 2016 and we’ve already had a humdinger of a year. We take you through the top 20 things that have affected Singapore’s finance space this year, and if you think it’s too soon to make this list, all we can say is wait till you read what’s already happened.
The only thing left to be done this year is for the USA to finally lift interest rates. The problem is, if it happens, we’ve been expecting it for the past year, and if it doesn’t, we’ve also been expecting it for the past year.
Without further ado, here is the first half of our top 20 things, in no particular order, that happened in 2016.
1. Singapore could be headed for a technical recession
On 24 November 2016, The Ministry of Trade and Industry (MTI) announced that Singapore’s real GDP growth rates had declined by 2% on a quarter-on-quarter seasonally adjusted basis. This comes on the back of more negative news when the country’s non-domestic oil exports sank 12% in October as well as a negative growth in Singapore’s economy in 3Q 2016.
All this raises the prospect of Singapore heading into a technical recession in Q4 and even a full-blown recession in 2017. Looks like we need to buckle down and grind through 2017.
2. S&P 500 Index at all-time high; STI not so lofty
As at 24 November 2016, the S&P 500 index stands at 2204.72, its all-time highest level. This signals the positive sentiments of growth in the USA. Thoughts on the ground is that Donald Trump’s policies will boost infrastructure spending, ease regulations and reduce taxes. This points to a strengthened USA economy, which even the Federal Reserve feel warrants an increase in interest rates now.
Over in Singapore, sentiments are not so jubilant. At 2867.21, it is closer to the lowest point than the highest point in the last five years. This is perhaps a reflection of the local economy and its ability to generate growth.
3. Singapore Fintech Festival
Singapore celebrated its Fintech festival from 14 Nov to 18 Nov 2016. This event really marks the nation’s push to utilize technology as the next leap for growth and prosperity. Singapore is a small, nimble, rich and technologically-savvy country, and this makes it a great test-bed for new technologies. And with the government supporting new start-ups in this area through mentorship programmes and funding, it could very well be the next economic driver in the coming years.
4. Donald Trump is President-elect
On 8 November 2016, Donald Trump was elected to be the next president of the USA. This result took the country, and the rest of the world, by surprise. After an initial phase of uncertainty, where the stock markets went into a selling frenzy, worried of his hardline international rhetoric and policies, people now think his policies will be a boon for the USA, at least in the short run.
Back when the world hadn’t known Donald Trump was to be the next president of the USA, Brexit was a pretty big deal. The cheaper pound (GBP) presented a good opportunity for travel to the country, offered great deals for online shoppers and was a boon for many Singapore students there. However, this would have longer term implications for not just the EU (European Union) but also the rest of the world and Singapore.
When the major economies in the world seem to be turning inwards, it spells danger for open and trade-dependent ones like Singapore.
6. SMRT is taken private
SMRT was delisted on the Singapore Exchange (SGX) on 1 November 2016, in what many will view as a nationalization of our public rail network. In reality, we should question the privatization of the sector in the first place.
Was a profit-seeking entity going to care about service standards knowing it is a monopoly. Even if the answer is no, there is a big question mark hanging over the details of how the company is going to rectify the situation of constant breakdowns. After paying out good dividends for years, at the expense of proper maintenance, it falls on the public to pay for maintenance once significant investments is needed to carry it out.
7. Listing of first REIT ETF in Singapore
On 20 October 2016, the Phillip SGX APAC Dividend Leaders REIT ETF marked the listing of the first SGX REIT (Real Estate Investment Trust) ETF (Exchange Traded Fund). Catering to Singaporeans’ craving for real estate investments, this REIT offered locals a low-cost and diversified way to jump on the bandwagon.
8. Introduction of CPF’s Lifetime Retirement Investment Scheme
At the tail end of July, the CPF advisory panel recommended the setting up of a Lifetime Retirement Investment Scheme (LRIS), allowing Singaporean to invest their CPF monies in diversified low-cost funds. This idea probably stem from the inability of retail investors to deploy their CPF money in investments that are able to beat CPF returns in the first place.
9. Finance Minister Heng Swee Keat suffers stroke
Our Finance Minister, Heng Swee Keat, suffered a stroke on 12 May 2016 during a cabinet meeting. Being responsible for the financial security of Singapore is not child’s play. His important came to the fore during this episode and many people starting finding out the important of a Finance Minister.
This also puts into perspective that as employees we should take care of our health as it may lead to us not being able to work.
10. 4th national carrier is inevitable
In September, three parties threw their hats into the ring for the race to become the fourth telco provider in Singapore. While lucrative, this will be a tough business to get into and only government intervention has allowed it. Without on-going support from the government, it may be tough for the telco to survive if it does not provide good and high value services that gains users quickly.
On the flipside, some positives has already been apparent for locals with the lower subscription plans and some innovative ones including the SIM only plans. Consumers may be able to rejoice for the time being. But at the end of the day, whether the 4th telco dies off and normal pricing resumes, or becomes big enough and start charging higher prices, consumers will have to pay more in the long-term.
Are there other events that you think should have been in our list? Let us know in the comments section!
 Ministry of Trade and Industry Press Release (24 November).