A Singapore-based brokerage gives its quick takes on a number of investment themes and likely market shifts, including the boost to certain markets by people taking delayed holidays.

The business buzz caused by sporting events and post-pandemic “revenge tourism” are two positive forces for parts of the world economy, argues Singapore-based online trading platform Tiger Brokers. The firm also points to a “bullish reversal” in US equities later this year, while expecting a shallow eurozone recession. 

Asia could be heading for a slowdown, but the firm pointed to a number of “silver linings” in certain jurisdictions, such as Singapore and Indonesia.

Discussing themes, the brokerage talked about how technology, travel and sports will drive significant investment opportunities. 

“With the reopening of China and the easing of regulatory policies on the tech sector by authorities, a boom can be foreseen in industry sub-sectors such as AI, cloud computing, cybersecurity, the metaverse, robotics, and IoT,” the firm said in a note.  

“Revenge travel will continue to soar this 2023 as more regions are easing up restrictions and opening up their borders to international and domestic travel. This entails a foreseen increase in both leisure and business activities that will feed investments in tourism and consumer sectors,” it continued. (“Revenge travel” is a slang term for leisure travel that follows a period of being unable to travel, as in the case of the lockdowns).

The brokerage also argues that sports can lead to “great investment bets.”

“The scenes of the 2022 Olympics, the jubilation of the FIFA World Cup Finals and the 2022 Singapore Grand Prix are all still lingering beyond sportsmanship…More than just bringing wins for fans, sporting experiences can likewise be a feat for investors with the right investment knowledge and tools,” it said. 

US, eurozone and Asia
The firm said that fears of a US recession this year could add to downward pressure on US equities, although there could be a “bullish reversal.” “The likelihood of the Federal Reserve raising interest rates in the first half of 2023, coupled with China’s reopening, will bring positive news to the global economy,” it said. [This is partly based on the view that once rate rises happen and have been priced in, future-looking investors will warm to the US equities market.]

On Europe, the brokerage noted how Russia’s invasion of Ukraine has hit European growth, while inflation has hit corporate profits and consumer income. “This implies the eurozone might experience a shallow recession amidst an inflationary environment in 2023,” it said. 

As for Asia, Tiger Brokers looked at a number of specific jurisdictions where the outlook is relatively benign.

For example, the firm said that Singapore's gross domestic product is expected to grow by 2.6 per cent in 2023, driven by momentum in the services industry. However, growth will be dampened by weakening global demand in the manufacturing sector, it said. 

For Indonesia, Tiger Brokers said that investors have focused more on local Indonesian stocks rather than overseas stocks due to government regulations over the years. Other main focuses are crypto assets and foreign exchange, which are predominantly traded by “young audiences.” Crypto gained traction after COVID-19 when local influencers started showing off their wealth on social media, it said.

In 2023, Indonesian GDP is projected to grow by 4.9 pere cent on average in 2023-24, only slightly slower than in 2022, “reflecting softening but still robust private spending.”

The firm switched its attention to Vietnam, observing that its GDP has grown at an average annual rate of 6 per cent in the past 10 years. “This year, after the strong rebound in 2022, Vietnam is expected to moderate as the growth of exports to major markets slows – with GDP increase projected at 6.3 per cent,” it said. 

Concluding on Thailand, Tiger said: “The number of Thai investors who opened accounts on the Stock Exchange of Thailand has increased steadily in the last 10 years, and the proportion of online accounts has also increased year-by-year. Relatedly, growth in Thailand is projected to accelerate to 3.6 per cent in 2023, reflecting the delayed recovery of contact-intensive sectors like tourism and transport.”