The subprime crisis and the many malicious tentacles extending from it (the chief one being inflation) have dominated (negative) global attention over the past year but I feel several themes have receded into the background as a result though they still remain compelling stories in their own right. One of them is the remaking of Singapore.
Make no mistake, this is one big story in the making. When you have record construction book orders for several years in a row that is driven by a single-minded governmental drive to reposition from manufacturing to services and consumption, it will generate a displacement effect that benefits certain sectors and affects others in a significant way. A likely beneficiary will be retail, as highlighted in my writeup at the start of 2008: Fundamental Trends to Watch for 2008.
Retail was huge in the 1980s and early 1990s, driven by Singapore’s emerging status as a tourism and aviation hub amid the bustling tiger economies of Southeast Asia. They were also the years when infrastructure buildup was strong — the key one being the MRT, and we had free-spending Japanese tourists as the main foreign spenders while locals’ spending power grew prodigiously through a 20-30 year boom period. It was a multi-year secular theme and the hot stocks were retail, hotels, property and construction. It was an era when among the ten richest men was a retail tycoon (the boss of CK Tang). Read more…