In a recent study conducted by a Japanese firm on the Global Power City Index, Singapore managed to retain its 5th place ranking among world cities. This index evaluates and ranks the major cities in the world based on their ability to attract talented and creative people and businesses. It is considered excellent news for the financial sector and, in particular, Singapore stock exchange which benefits greatly from the sort of people in question.
Which Cities Won?
The Institute of Urban Studies, which is a Tokyo-based think tank, announced the city rankings in the Mori Memorial Foundation.
London was ranked as the top city for the second year in a row, while New York, Paris, and Tokyo were ranked second, third, and fourth respectively. Singapore has climbed from the 11th place in 2008 to 5th over the past years.
A total of 40 major cities were included in the survey and were evaluated based on living conditions, economic standing, research and development. Factors such as cultural interaction and accessibility also carried weight.
Researchers, visitors, managers, artists, and residents were among the different types of people asked to answer survey questions. Among managers, Singapore actually ranked second but was ranked 38th among artists. The city-state ranked fourth in cultural interaction but was in 34th place when it came to liveability.
According to Chairman Heizo Takenaka, Singapore has been establishing itself as an education hub, with its rapidly growing further educational system, and a financial hub, with the growth of the Singapore stock exchange as a leading IPO candidate, in the Asia Pacific region. He also commended the reforms being implemented by the government.
As for the financial sector, Singapore’s shares saw a strong rally in the recent trading session as sentiment improved in overall markets. Equities ended Friday on a strong note, marking its third day in consecutive gains.
The improvement in Chinese data was seen to be the catalyst for today’s set of gains, as well as the upbeat sentiment spurred by the Global Power City Index results. Prospects of further reforms and innovation by the Singaporean government also helped boost optimism for the Singapore economy and the Singapore stock exchange.
Bear in mind that fundamental factors like these tend to be bullish for the local currency, as the prospect of strong and stable growth tend to yield higher returns for holding the country’s assets and therefore boost demand for the currency. In turn, stronger demand is positive for the currency price.
The Monetary Authority of Singapore has not announced any limits on currency appreciation, as it is expected to counter inflationary levels in the country. Home prices have been surging in the past years and the government has already implemented some measures to keep the bubble from bursting, but it appears that purchases of private homes are still weak in the recent months.
For now, the central bank has allowed the current pace of appreciation of the Singapore dollar. However, further increases in the currency value might make it more expensive for tourists to take a vacation in the city-state. Tourism accounts for a sizeable chunk of the nation’s GDP and provides several jobs to locals, so a downturn in activity might weigh on growth.
For the past quarter, Singapore has reported a 1.0% economic contraction, which is simply a small pullback compared to the previously reported 16.9% economic growth in the second quarter.
What Does This Mean For The Singapore Stock Exchange?
The importance of attracting bright young talent to a financial center like that of Singapore cannot be understated. Growth is built on innovation in the way the financial sector operates, and the resulting sentiment of investors towards the economy.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS