Tony Tan

According to Channel NewsAsia, “Financial markets like London may face stiff competition as fast-growing emerging economies like China and India attract more investments.   The Government of Investment Corporation or GIC’s Deputy Chairman and Executive Director, Tony Tan, said this at the UK Financial Service Forum Panel held in London on Monday.

Dr Tan said: “For investors, the rise of emerging markets will mean that a larger proportion of their investments will be in these markets. Far from being a risky and perhaps alternative part of their portfolio, emerging markets will become a core and unavoidable asset class in global portfolios.”

This, he added, will also lead to more financial institutions and centres being developed in such economies.   Despite the competition, Dr Tan believes that London need not lose out. He said that the city’s deep financial expertise should allow it to tap into opportunities arising from global shifts in investments.   Dr Tan noted that the post-crisis environment will also be more difficult for developed economies compared to emerging economies.

“Growth will likely be modest for a number of years as the economies recover from the credit bubble and its bursting,” Dr Tan said, as he shared insights on the possible challenges and opportunities London will face post-crisis.”

Read more: Channel NewsAsia

Tony Tan

According to Bloomberg, “The global rebound is “fragile” and shocks could push the world toward another recession, according to Government of Singapore Investment Corp., manager of more than $100 billion of the nation’s foreign reserves.

Risks to the global recovery have increased due to Europe’s debt turmoil, continued deleveraging in the U.S. and protectionist pressures, Tony Tan, deputy chairman of GIC, said in a speech in Singapore today. The fund is ranked the world’s sixth-largest state investment company by Sovereign Wealth Fund Institute in California.

“The economic recovery, while real, is fragile and there is a risk that negative shocks could push the global economy towards a recession sooner than expected,” Tan said. “The strong rebound in global industrial production is peaking while monetary and fiscal policies, particularly in the larger emerging economies, are being normalized.””

Read more: Bloomberg

“This could manifest itself in the form of protectionist measures not only in world trade but also in financial markets and impede the free flow of funds,” he said.

“If nothing else, this could derail the global economic recovery which all of us are hoping for,” said the GIC deputy chairman.

Jin Liqun, from the China Investment Corporation (CIC), also cautioned against barring investments from government-owned funds. “The sovereign wealth funds will be playing a big role in rebalancing the process but we need co-operation from the recipient countries,” said Jin, CIC’s chairman of the board of supervisors.

“There’s nothing we can do if we are barred from doing our jobs in your countries or when hurdles are very high for us to overcome,” he said.

Jin said sovereign funds can play a major role in restructuring economies.

“Countries need a cushion in undertaking major economic restructuring and provisional funding is of course crucial,” he said, adding that the global recovery was not irreversible.

When the global crisis unfolded, SWFs emerged as a source of crucial capital, especially to Western financial firms and banks in dire need of fresh funding. Singapore’s GIC, which manages the city-state’s reserves of more than $100 billion (Dh367bn), was one of the rescuers of US-based Citigroup and Swiss banking giant UBS. Kuwait Investment Authority’s (KIA) Managing Director Bader Al Saad told the forum that SWFs have collectively pumped $90bn into financial institutions in the last few years.

“I think now we are in a new era of engagement,” said Al Saad.

“There is a unique opportunity for the sovereign wealth funds to represent themselves as investors in the world… They are a long-term investor,” he said.

Al Saad also said perceptions that SWFs were a source of destabilisation in financial markets and that investments were driven by political agendas could not be further from the truth.

“Most of their transactions are cash transactions so there is a real economy and it shows that they are responsible investors,” he said.

“They are a source of stability and last but not least, they are strategic investors… On top of that, they never make hostile takeovers.”"

read more: Business 24-7

Tony Tan

Reuters reports that, “Singapore’s biggest sovereign wealth fund GIC said on Tuesday that the greatest risk facing Asia is a global economic and financial environment that does not stabilise and recover by 2010.

‘If the U.S. economy turns out to be worse than expected, requirements for banks’ capital will be higher and the U.S. administration might need to go back to Congress to ask for additional funding,’ Tony Tan, deputy chairman of the Government of Singapore Investment Corp said in a speech.

‘Downside risks remain high, despite signs of stabilisation,’ he said.”

read more: Reuters