Wealthy people in Asia are readying cash to take advantage of opportunities in financial markets and private equity once the COVID-19 pandemic subsides, the head of private banking at Southeast Asia’s largest lender said in an interview this week.
Clients have increased cash holdings to about 40 percent of their portfolios in recent months, up from about 30 percent before the pandemic, said Joseph Poon, who leads DBS Group Holdings Ltd’s Private Bank unit.
While the unit does not disclose assets under management, it is part of DBS Group’s S$251 billion (US$184 billion) wider wealth platform, which is among the largest in Asia.
Photo: Reuters
“Clients are holding a lot more cash than usual. It’s a very interesting phenomenon,” Poon said.
“Ultra-high-net-worth clients believe there will be a good opportunity in the marketplace once the pandemic impacts have flown through the economy,” he said, referring to those with at least S$30 million in investable assets.
Clients are considering financial assets, e-commerce and logistics businesses with funding gaps, he said. Some plan to use the cash for their own business needs and might use it to expand companies through partners.
Poon’s insights mirror a wider trend.
Data compiled by Bloomberg showed that leading private equity firms are sitting on about US$1.6 trillion of dry powder after the pandemic halted private equity deals and roiled global markets.
Still, holding on to cash might mean that some investors have already missed a massive market rally, with the MSCI AC Asia Pacific Index surging about 43 percent since its March low.
New assets inflows — or net new money — at DBS Private Bank and another one of its wealth businesses more than doubled to S$5 billion in the first half, Poon said.
The funds came from a range of destinations, including family offices in the US, Europe and elsewhere that see Singapore as “a strong jurisdiction,” he said.
DBS Private Bank, which accepts clients with at least S$5 million in investable assets, is part of DBS Group’s wider wealth platform, which reported that assets grew 7 percent at the end of June from a year earlier.
DBS Group expects assets under management to grow at a similar rate this year, Poon said.
Elsewhere in the region, DBS Group is on track to double the wealth assets at its Thai brokerage unit to S$8 billion by 2023.
The bank has seen rich Thais looking at private banking products in Singapore as they hunt for global investments, Poon said.
It is also looking to expand in the Philippines, where it only has a representative office, Poon said, without giving more details.
“We kicked off some discussions last year and are still in the midst of structuring the best way to tap on the growing onshore high-net-worth individuals’ increasing investment appetite,” Poon said. “Still, it’s early days.”
ELECTRONICS BOOST: A predicted surge in exports would likely be driven by ICT products, exports of which have soared 84.7 percent from a year earlier, DBS said DBS Bank Ltd (星展銀行) yesterday raised its GDP growth forecast for Taiwan this year to 4 percent from 3 percent, citing robust demand for artificial intelligence (AI)-related exports and accelerated shipment activity, which are expected to offset potential headwinds from US tariffs. “Our GDP growth forecast for 2025 is revised up to 4 percent from 3 percent to reflect front-loaded exports and strong AI demand,” Singapore-based DBS senior economist Ma Tieying (馬鐵英) said in an online briefing. Taiwan’s second-quarter performance beat expectations, with GDP growth likely surpassing 5 percent, driven by a 34.1 percent year-on-year increase in exports, Ma said, citing government
‘REMARKABLE SHOWING’: The economy likely grew 5 percent in the first half of the year, although it would likely taper off significantly, TIER economist Gordon Sun said The Taiwan Institute of Economic Research (TIER) yesterday raised Taiwan’s GDP growth forecast for this year to 3.02 percent, citing robust export-driven expansion in the first half that is likely to give way to a notable slowdown later in the year as the front-loading of global shipments fades. The revised projection marks an upward adjustment of 0.11 percentage points from April’s estimate, driven by a surge in exports and corporate inventory buildup ahead of possible US tariff hikes, TIER economist Gordon Sun (孫明德) told a news conference in Taipei. Taiwan’s economy likely grew more than 5 percent in the first six months
SMART MANUFACTURING: The company aims to have its production close to the market end, but attracting investment is still a challenge, the firm’s president said Delta Electronics Inc (台達電) yesterday said its long-term global production plan would stay unchanged amid geopolitical and tariff policy uncertainties, citing its diversified global deployment. With operations in Taiwan, Thailand, China, India, Europe and the US, Delta follows a “produce at the market end” strategy and bases its production on customer demand, with major site plans unchanged, Delta president Simon Chang (張訓海) said on the sidelines of a company event yesterday. Thailand would remain Delta’s second headquarters, as stated in its first-quarter earnings conference, with its plant there adopting a full smart manufacturing system, Chang said. Thailand is the firm’s second-largest overseas
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) market value closed above US$1 trillion for the first time in Taipei last week, with a raised sales forecast driven by robust artificial intelligence (AI) demand. TSMC saw its Taiwanese shares climb to a record high on Friday, a near 50 percent rise from an April low. That has made it the first Asian stock worth more than US$1 trillion, since PetroChina Co (中國石油天然氣) briefly reached the milestone in 2007. As investors turned calm after their aggressive buying on Friday, amid optimism over the chipmaker’s business outlook, TSMC lost 0.43 percent to close at NT$1,150