SINGAPORE – Singapore is attracting wealthy investors and family offices moving their money out of the troubled Middle East in search of a safe haven.
March financial data released by the Monetary Authority of Singapore (MAS) – the first month available since the Gulf war erupted on February 28 – confirmed anecdotal reports that the rich were moving their assets to Singapore, and to a lesser extent, Hong Kong, after the war.
Looking at the data, Maybank’s economists Dr Chua Hak Bin and Mr Brian Lee said these flows are reflected in an outsized jump in March for Singapore deposits, foreign currency deposits, deposits by non-residents, MAS foreign reserves, and gold imports from Dubai.
Total deposits rose by $66.2 billion, or 7.2 per cent year on year, to $2.1 trillion in March, accelerating from a 4.8 per cent increase in February, MAS data showed.
The rise was driven by a 7.8 per cent increase in Singapore dollar deposits and a 6.7 per cent gain in foreign currency deposits, the economists told ST.
A significant portion of the surge was driven by non-resident deposits, which jumped 5.3 per cent from February to March, increasing by $33.2 billion to reach $659.1 billion.
On a year-on-year basis, non-resident deposits grew 4.6 per cent. There is no available breakdown by nationalities.
The inflows have also fed into official reserves, which rose by $15.5 billion in March and a further $2.4 billion in April, signalling continued capital entering the financial system.
At the same time, gold flows offer another indication of safe-haven demand.
Singapore’s gold imports from the UAE surged to a five-year high of 1,446kg, worth US$220 million, in March.
Dealers said high-net-worth investors with bullion stored in the UAE have grown concerned about insurance coverage and the ability to move assets quickly if airspace is disrupted.
