Singapore boasts of the privilege of being a world-class financial center, a much-favored investment climate for its citizens, and foreigners and expats. For expatriate investors to realize and preserve the value of their savings, they must consider the ability to thrive in a world of economic inflation, coupled with taxes. Therefore, expats should regularly rethink the purpose of undertaking investments in Singapore, evaluate and decide on the most suitable and profitable business ventures. This article endeavors to highlight the most excellent investment options for expats residing in Singapore.
The Singapore Savings Bonds
For a considerable period, the Singapore Savings Bonds (SSBs) has been regarded as one of the most appropriate investment options for both citizens and foreigners. Many qualities are highlighted to set the SSBs apart from the rest of Singapore’s investments, including:
1. Pro-Rated Interests with No Liquidity
Whenever bonds are purchased, the maturity duration has to reach before the initial principal amount returns to the investor. However, when the investor decides to quit the market before the maturity date, the bonds have to be sold to a secondary market, vulnerable to pricing and liquidity issues. For an investor that holds the SSBs, the bonds are handed over to the government. This means that the principal amount and pro-rated interests are paid back by the government when they choose to exit the market. The current interest rates imply that expats investing in SSBs stand a chance of reaping high returns, even when they opt out of the stock market.
2. No Risks
The Singapore Savings Bonds are managed and backed by the government, an AAA-rated creditor. The risk-free environment is attributed to the country’s political stability, a suitable balance of payments, strong balance sheets, and fiscal government policies regarding the stock market. Therefore, the probability of risks is relatively minimal while investing in SSBs.
3. SGD Currency Stability
The stable Singaporean economy implies that the forex risk is significantly reduced. This means that the SGD dominated asset is equally stable. Investors and creditors have notably acknowledged the stability of the Singaporean economy, even in times of recession. Furthermore, investors have admitted minimal susceptibility to currency fluctuation. As compared to other investments, the SSBs are actually stable, guarantee high returns, and are suitable for the expats that are considering to invest in Singapore.
Dividend Stocks
The next area of consideration for investment by expats would be dividend stocks. Stable dividend stocks usually operate in an economic environment that is regulated and highly monopolistic. The Netlink Trust is a favored form of investment under this category, mainly because of the following reasons:
1. Closely Regulated
In Singapore, there is a regulatory body, IMDA, that tightly regulates the prices charged by Netlink Trust, which owns the majority of the country’s fiber networks. Furthermore, new investors joining the market have to be approved by the IMDA. The regulation of the prices may come as a limiting factor. Still, it serves to set the pace of pricing, which ideally guarantees safety while trading, and reduced risks of losing money.
2. It Is Monopolized
The Netlink Trust is the majority owner of the fiber networks in Singapore. This means that sizeable investment capital is pent in laying the fiber lines throughout the country. Since the company faces a minimum of no competition, it becomes worthy of investing in it. Furthermore, the prices are tightly regulated by an independent body, ensuring investors’ capital safety. This means that returns are guaranteed, both for citizen investors, as well as expats.
3. It Is a Singaporean Investment
Netlink Trust is fully backed by the government. When the country’s political and economic stability is considered, the Netlink Trust becomes a rather more substantial business that presently trades with a 6% yield.
The Singapore REITs
The Real Estate Investment Trusts in Singapore has for a long time, been favored by many investors traveling to the East. Various types of REITS are open for investment. While planning to invest in REITs, expat investors would want to consider particular factors in selecting the most suitable. According to several investors, suitable REIT should have the following qualities:
1. A strong Backing
A chosen REIT should have a formidable backup in terms of sponsorship. The owner or developer of the REIT should manage the most substantial portion of the trust, usually about 30% of the stake. Strong sponsors play vital roles in investment, such as facilitating fund accessibility and asset acquisition. Furthermore, strong sponsors, such as CapitaLand and the Far East, have a significant position in the investment.
2. The Assets Belong to Singapore
Investors would prefer investing in assets that are tightly regulated. This is the case with the assets in Singapore. The governments exercise regulatory control of land supply by moderating the prices. As a result, land prices tend to be generally stable with no sharp fluctuations. The REITs have proved to withstand the economic pressures of 2008. It is believed the stability is to be sustained for a better period. This should be an encouragement for the expats that are considering investing in Singapore’s real estate sector.
The Bottom Line
As discussed in this article, the Singaporean economic environment is favorable for both citizen and expat investors. The financial stability is suitable for the thriving of various investments ranging from Singapore Savings Bonds to REITS. However, it would be worthwhile for expat investors to evaluate the primary goal of investing and the expected returns before deciding on an appropriate field.
In this same breath, the Singapore Savings Bonds and the Netlink Trust would be a proper consideration among the other options because of their tested stability and regulation by the government and IMDA, respectively. Their returns are guaranteed, as well as the safety of the initial capital. I hope the points discussed in this blog are useful to potential investors planning on investing in Singapore. Learn more at https://www.instantloan.sg/.
