COVER STORY
The World Bank Global Outlook noted that 90% of advanced economies may recover to pre-2019 levels in 2022
Where to invest your money in 2022 Asian SPACs are expected to enter the Hong Kong and Singapore markets this year.
T
he last year was not without challenges, as supply constraints and the chip shortage continue—and 2022 might not be so different for developing economies. The World Bank Global Outlook noted that 90% of advanced economies may recover to pre-2019 levels in 2022, but only a third of emerging and developing markets will hit the same target. Travel restrictions might not be lifted this year due to emerging COVID-19 variants, thus leaving the aviation and tourism sectors struggling. Trade costs are still expected to be high, hampering international trade growth. With all of these developments, investing in 2022 might seem daunting. Hong Kong Business gathered some ideas on where to invest your money. Idea 1: REITs With inflation picking up following 2020’s economic recession, real estate is often thought of as a good hedge. But, based on historical data, Oliver Samson from Savills World Research said that it also depends on which region you plan to invest in. “From a regional perspective, Europe provides the best inflation hedge in comparison with North America or the Asia Pacific. This is underpinned by the widespread use of indexation, which is quite unique to European real estate, and differentiates the region from its global peers,” Samson said on Savill’s Inflation Implications for Real Estate report. For the Asia Pacific, Samson noted that lease lengths 16
HONG KONG BUSINESS | Q1 2022
IPO activity in Asia was undeterred by the pandemic. As of midNovember 2021, a record of US$9.8b was raised from 121 IPOs from SEA alone
tend to be shorter than their international counterparts, at approximately three to five years. This, in turn, causes demand conditions to differ across major cities and sectors. “Vacancy rates tend to be higher in office and retail compared with industrial (similar to the global trend), and are much lower in Tokyo compared with other markets such as Shanghai and Singapore. Shanghai retail leases, much like many other cities globally, often include a turnover linked component,” he said. Idea 2: Asian Capital Markets Initial public offering (IPO) activity in Asia was undeterred by the pandemic, which several economies continue to battle to this very day. Data from Deloitte reported that as of mid-November, there was a record of US$9.8b raised from 121 IPOs from Southeast Asia alone, overtaking last year’s performance. Thailand had raised the highest funds from IPOs for the third consecutive year, followed by Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. Whilst it is possible that 2022 will continue to have a robust IPO market, investors have another thing to look forward to: special purpose acquisition companies (SPACs). In September 2021, the Singapore Exchange released its regulations for black cheque listings. Hong Kong is expected to follow suit in 2022 with its own regulations. These two influential markets can light a fire that could lead the way to SPAC listings in other markets, giving companies a faster option to raise funds.
