Accountants See Singapore's Star Rising Fast

The Association of Chartered Certified Accountants' Global Economic Conditions Survey reveals a growing confidence in Singapore’s importance as a global financial hub.


The financial crisis has actually been beneficial for Singapore’s fortunes as a financial centre, the survey reveals. 


The survey shows that Singapore is one of the clear winners from the downturn, gaining in significance as there are clear signs of an intensifying global power shift from developed to emerging economies, along with a shift from the traditional centres of economic power in Europe and the US.


Nearly half (46%) of all respondents in Singapore rated it as a centre of global significance, which is well above the average of 18% across all locations; while another third (34%) rated it as a centre of regional significance, again much higher than the global average of 24%. 


Overall, ACCA members located in financial hubs were more likely to say their cities had become more important (36%) as to say they had become less important (15%).


However the ratio in Singapore was much more favourable, with 61% saying it had become more important, as opposed to 9% who said the city state has become less important as a centre. In fact, 36% of respondents in Singapore report that their city had become ‘much more important’ as a financial centre.


ACCA’s survey documents a general shift in financial influence, with Africa and the Asia-Pacific region emerging as the clear winners. For individual markets, results suggest that mainland China, excluding Hong Kong, was the biggest winner among the selected countries.


“It’s not a secret by now which way the global balance of power is shifting," says Darryl Wee, country head of ACCA Singapore.


"What’s more interesting are the detailed findings which show a small group of global financial centres, including Singapore, enjoying an ever-growing advantage over their competitors. Going forward we expect that many emerging economies will redouble their efforts to develop global financial clusters.”


The main survey showed that for the first time since the surveys began, there had been a loss of confidence in the Asia Pacific region, with Hong Kong and Malaysia particularly affected, while the Chinese mainland has managed only a small loss of confidence. Only Singapore has bucked the trend by recording further confidence gains. 


ACCA believes that this quarter’s findings have been heavily influenced by the catastrophic events in Japan.


Overall, more respondents in the region still believe that global economic conditions are improving or about to do so (49%) than the opposite (41%).


But the report also notes that there is a wider trend at play; the region’s accountants have seen ever smaller confidence gains in the last two years and the recovery in Asia is being delayed by the Western world’s continued economic malaise. 


Inflation continued to rise throughout the region, with 71% of respondents reporting rising operating costs for their organisations and clients, up from 62% in the last quarter. Of course it is not just ACCA that is worried by this trend; authorities in many parts of the region are reigning in the supply of credit, which the survey suggests is currently growing at its slowest pace in 18 months.


Respondents in the region have revised their expectations on medium-term (5yr) government spending downwards as they prepare for further government efforts to control inflation.


As a consequence of the continued monetary tightening, the share of respondents in the region who reported problems accessing finance (32%) rose significantly compared to the last quarter.


The share of respondents reporting falling income and problems due to volatile exchange rates also rose. Fortunately these problems are not (yet) putting undue strain on cashflow and businesses don’t appear to be failing at a faster rate, while last quarter’s marginally negative trend in investment also remained unchanged.


Opportunities, however, have continued to present themselves to accountants and their employers.


In the latest quarter, respondents saw increased opportunities to profit from changes in customer behaviour, and despite subdued demand in the last quarter, they see more opportunities to increase orders in the immediate future.








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