Wealthy Nations Daily Update - Singapore

For the first time in Singapore’s short history its leadership may come under serious contention. Today’s general election may no longer be about loyalty to Singapore’s founding father Lee Kuan Ywe (LKY) who passed away in March this year. His People’s Action Party (PAP) has dominated the governing of the country for the entire 50 years of its independence; over which LKY ruled for half and with his son, Lee Hsien Loong, now incumbent. PAP’s popularity and the public’s reverence for the Lee family over that time has waned little, at least until now as concerns over living costs, immigration and inequality take grip.

Yet from an external perspective the leadership hasn’t really deteriorated or given cause for the apostasy of at least 40% of the voting public. Indeed the continual success of the country has bred multiple generations whose life experiences teaches them to expect the same high standards; standards that may be unattainable in current circumstances. One example that Singaporeans no longer deify their leadership was the pressure a few years ago for Mr Lee to take a pay cut. Nobody minds having the highest paid prime minister if they transform your country from “a third world to a first world country in a generation”; but now the people may just want more value for money and perhaps a more balanced democracy - where the increased political competition helps strengthen leadership beyond what it already is. A significant concern for Mr Lee politically but not financially as his salary still amounts to around USD 2m and failing that he can always fall back on his wife’s earnings as the CEO of Temasek.

Although the current parliament suggests only a flicker of support for an opposition who hold 7 of the 87 seats, the underlying vote statistics was much less favourable. PAP managed to attain 93% of the seats with only 60% of the vote. This year some speculated that the nationalism surrounding the half-centenary would boost support for the standing leadership but recent polls suggest otherwise. A slight swing in votes from last year could mean a significant change in seats won.

Historically LKY was known for strong arm tactics against competition enacting lawsuits and publicity wars. Correspondingly leading up to this election his son Mr Lee warned that the country would be “finished” were the opposition to win. We’ll wait to see whether the public believe Mr Lee or see his comments as a sign of insecurity.

Anyone who’s even glanced at Singapore on Google Maps, and the crowded straits around it, knows just how important a trade and shipping hub it is for the whole of Asia. But it is also an example to the rest of Asia of a flourishing democracy and today’s probably close result, even if uneventful, is a reminder to its neighbours that the public voice is a powerful one and demands ongoing effectiveness even from the likes of the PAP with legacies of accomplishments. It also contrasts with the electoral uncertainties in debt laden Europe and is another reason why historically Singapore has been a source of strong credits offering value.

Please read this important information before proceeding. It contains legal and regulatory notices relevant to the information on this site.

This website provides information about Stratton Street Capital LLP ("Stratton Street"). Stratton Street is authorised and regulated by the UK's Financial Conduct Authority. The content of this website has been prepared by Stratton Street from its records and is believed to be accurate but we do not accept any liability or responsibility in respect of the information of any views expressed herein. The information, material and content provided in the pages of this website may be changed at any time by us. Information on this website may be out of date and may not be updated or removed.

The website is provided for the main purpose of providing generic information on Stratton Street and on our investment philosophy for the use of financial professionals in the United Kingdom that qualify as Professional Clients or Eligible Counterparties under the rules of the United Kingdom Financial Conduct Authority (the "FCA"). The information in this website is not intended for the use of and should not be relied on by any person who would qualify as a Retail Client. Products and services referred to on this website are offered only at times when, and in jurisdictions where, they may be lawfully offered. The information on this website is not directed to any person in the United States. The provision of the information on this website does not constitute an offer to purchase securities to any person in the United States (other than a professional fiduciary acting for the account of a non-U.S person) or to any U.S. person as such term is defined under the Securities Act of 1933, as amended.

The website is not intended to offer investors the opportunity to invest in any Alternative Investment Fund ("AIF") product. The AIFs managed by Stratton Street are not being marketed in the European Economic Area ("EEA") and any eligible potential investor from the EEA who wishes to obtain information on the AIFs will only be provided with materials upon receipt by Stratton Street of an appropriate reverse solicitation request in accordance with the requirements of the EU Alternative Investment Fund Managers Directive ("AIFMD") and national law in their home jurisdiction. By proceeding you confirm that you are not accessing this website in the context of a potential investment by an EEA investor in the AIFs managed by Stratton Street and that you have read, understood and agree to these terms.

No information contained in this website should be deemed to constitute the provision of financial, investment or other professional advice in any way. The website should not be relied upon as including sufficient information to support any investment decision. If you are in doubt as to the appropriate course of action we recommend that you consult your own independent financial adviser, stockbroker, solicitor, accountant or other professional adviser. Past performance is not necessarily a guide to the future. The value of investments and the income from them may go down as well as up. An application for any investment or service referred to on this site may only be made on the basis of the offer document, key features, prospectus or other applicable terms relating to the specific investment or service.

Where we provide hypertext links to other locations on the Internet, we do so for information purposes only. We are not responsible for the content of any other websites or pages linked to or linking to this website. We have not verified the content of any such websites. Such websites may contain products and services that are not authorised in your jurisdiction. Following links to any other websites or pages shall be at your own risk and we shall not be responsible or liable for any damages or in other way in connection with linking.

By using this site, you should be aware that we may disclose any information that we hold about you to any regulatory authority to which we are subject, or to any person legally empowered to require such information.

This website uses cookies to improve user experience, by clicking the "I Accept" button below means you consent to the use of cookies on our website.