SINGAPORE: With the war in the Middle East now well into its second week with no signs of an immediate end, there have been signs that investors and high-net-worth individuals are planning on moving their assets to Singapore.
The conflict began when the United States and Israel started bombing Iran on Feb 28. Iran’s retaliatory action almost immediately involved several other countries in the region where there are US bases, including Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait, Jordan, and Oman.
These developments have caused some to consider moving their assets to Singapore, one of the most financially and politically stable nations around the globe. With its reputation as a wealth management hub, the city-state has long been a place for the wealthy to park their money.
A March 6 Reuters report mentioned, for example, two Indian entrepreneurs based in Dubai who tried to move over US$100,000 each to Singapore amid the risks brought about by the conflict in the region.
Singapore is not the only city in Asia that high-net-worth individuals are considering; however, with Hong Kong, the other financial hub in the region, as another possibility.
Like Singapore, states in the Gulf were long considered to be a safe haven for the rich. Dubai, in particular, has long been a favoured location for wealthy Chinese to place their assets. However, the current conflict has poked a large hole in that perception.
Strikes in civilian areas in Dubai, including the airport, have not resulted in casualties, but according to a CNN report from earlier this week, “the psychological impact can be significant.”
Though it has only been 12 days, the transfer of assets to Singapore appears to have already begun.
Ryan Lin, a private wealth lawyer based in Singapore, told Reuters that three of his clients in Dubai with an average of $50 million in assets have said they intend to transfer assets to Singapore. One is even “checking how quickly they can transfer everything” to the city-state.
However, whether there will be a significant transfer of assets from the Middle East to Singapore, and even Hong Kong, is likely to depend on Iran’s continued retaliatory response, how long the conflict will last, and how much of the region is affected.
Though conditions remain volatile, there has not yet been significant capital flight from the Middle East, according to the Reuters report.
The world’s wealthy normally park their assets in different areas around the globe, and it is not unusual to have funds in several regions.
Furthermore, the central bank of the United Arab Emirates has assured the public that its banking systems are stable and are operating normally, providing services without disruption.
“The UAE’s banking and financial sector continues to demonstrate the highest levels of resilience and stability. Banks, financial institutions, and insurance companies across the country are operating normally and continue to deliver their services to customers and the public efficiently and without disruption nationwide,” said Khaled Mohamed Balama, Governor of the Central Bank of the UAE. /TISG
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