Market Commentary

Looking back over 2022, there is no doubt that global issuesimpacted the APAC region. Even though many experts believe that the Far East is set for significant relative growth compared to the US, UK and Europe, 2022 was challenging. We will now look at the leading APAC indices and their performance over the calendar year 2022.

Wealth management and asset management are already prevalent in the lifestyles of many people in the APAC region. This is set to increase dramatically as a rising youthful workforce offers an attractive hedge against an ageing population. The region is home to more than 600 million youths aged between 15 and 24. The potential is enormous in relation to wealth management and asset management. So, what does the future hold?

The growing economic and financial power of the APAC region is expected to come to the fore over the next couple of decades. This will have enormous implications for investment markets with growth in domestic demand and supply as well as investment by overseas companies. Back in the 1980s, led by Japan, the Far East was one of the strongest economies in the world. Unfortunately, the demise of Japan reduced this power, but history is about to come full circle!

While the Regional Comprehensive Economic Partnership (RCEP) may attract little media coverage outside the Far East, this trade arrangement could be a game changer. The partnership has been in the offing for some time, although it was only officially launched in January 2022. So who is part of the RCEP, and what are the long-term benefits?

A joint report published by Raffles Family Office and Campden Wealth has cast a fascinating light on the thoughts of family offices going forward. The report is based on a survey of 382 family offices worldwide, with 20% situated in the Asia-Pacific region. Focusing on the 76 Asia-Pacific-based family offices that responded to the survey, some interesting trends are emerging.

If we look at Far Eastern financial markets today, the power axis has changed dramatically over the last 40 or 50 years. It is very easy to forget the heady heights of the 1980s and the booming Japanese stock market. Fast forward to today, and the situation is very different, but what does the future hold?

The subjects of global investment, diversification and access to overseas markets are front and centre for investors and financial markets. For many years the UK has been one of the leading countries in financial services and the enhancement of global investment opportunities. Moreover, as individual countries and the broader APAC financial service sectors continue to grow, we have seen the enhancement of relations with the UK.

There is no doubt that the FinTech market has been one of the major success stories since the turn of the century. These nimble and innovative start-ups have disrupted traditional markets and forced many banking institutions onto the back foot. While the future still looks promising for FinTechs, recent developments have seen valuations come under pressure. Will traditional banks raid the APAC FinTech sector and take advantage of reduced valuations?

The Milken Institute Global Opportunity Index is a valuable measure of how attractive a country is to foreign investment. Considering an array of different criteria, the index allows us to measure the current situation and changes over the years. For example, which countries appear determined to increase foreign investment?

Over the years, we have seen considerable developments in trading technology, encouraging global investment and ultrafast trade execution. The ability to undertake global investment strategies is obviously beneficial but has new technology helped or hindered recovery from Black Swan events?