Global financial activities see gravity shift from Western hubs towards Asia
- Professor Sumit Agarwal of the National University of Singapore says fintech services factor into the growth of Asian financial centres
- He singles out Singapore as a ‘safe haven’ for investors with its political stability, trusted systems and transparency
Financial markets are in constant motion as institutional funds and private investors look to rebalance their portfolios and seek out new opportunities in emerging sectors.
But amid the daily trades reflected in the ups and downs of individual indices, there are also broader trends at work. These are driven by geopolitical factors, economic realities and the ongoing search for a sense of security coupled with reliable returns.
Over the past decade, that has seen a shift in gravity for global financial activities, moving away from the traditional centres in North America and Europe towards Asia. Most signs indicate that this reordering is set to accelerate further.
This shift is reflected in the latest edition of the semi-annual Global Financial Centres Index, jointly produced by the China Development Institute in Shenzhen and the London-based think tank Z/Yen Partners. It ranks Singapore and Hong Kong among the world’s top four financial hubs, after New York and London.
The ranking, released in September last year, also places three mainland Chinese cities – Beijing, Shanghai and Shenzhen – in the top 10. This confirms that the turn towards Asia has continued despite the impact of the Covid-19 pandemic and uncertainties such as those caused by Russia’s invasion of Ukraine.
A closer look at the causes of this shift reveals that investors of every type have three foremost considerations when deciding where to relocate funds or explore alternatives.
