Pockets of resilience in the technology sector

Pockets of resilience in the technology sector

  • Macroeconomic headwinds are taking their toll on consumer sentiment. Intentions for big-ticket purchases are falling, and firms are experiencing smaller order books.
  • Enterprise technology investment will be supported by a range of long-run factors. Demand from this segment will provide a buffer against cyclical challenges.
  • Developments in China are a key source of uncertainty, we are concerned that the scars from previous policy missteps may remain even as the government attempts to pivot.
  • The industry will face macroeconomic difficulties and slower growth, but opportunities exist in certain segments and geographies that can take advantage of secular trends.

Hong kong and china’s reopenings: boon or bane for singapore?

  • Singapore has been a beneficiary of Hong Kong and China’s pandemic policy missteps, enjoying the relocation of businesses and high-worth individuals, as a result.
  • Hong Kong and China’s long-awaited re-openings do not imply a reversal of Singapore’s fortunes, but Singapore will face increased competition from Hong Kong’s efforts to reclaim some of its lost business and investment activity
  • The re-openings are a positive-sum game for both of Asia’s financial centres, but Singapore should take heed not to rest on its laurels. Relying on its rivals’ mistakes is not a sustainable long-term economic strategy.

Regional updates

  • Malaysia records respectable growth in industrial production and retail trade in Nov 22.
  • South Korea’s central bank hikes rates by 25bps. It has set a high bar for what it is willing to accept as satisfactory disinflationary progress before it considers hitting the brakes.
  • India’s industrial production rebounded after a previous contraction, and other indicators point to strong domestic demand at the end of 2022. Core inflation risks persist.
  • China’s policymakers are determined to support economic growth after years of misguided pandemic management. We are sceptical of their chances of success.

Read more: CAA-Weekly-16-Jan-23.pdf