WHILE investors worldwide panic as the economy sours, Singapore is expected to weather the storm, business professors said at a panel discussion.
Held on October 20th, about 200 students and faculty turned up for the event at the Nanyang Auditorium. Chairing it was Nanyang Business School (NBS) Dean, Dr Jitendra Singh.
Looking forward, Dr Tan Khee Giap predicted that the current economic rollercoaster will last till the end of the year. US and Europe money markets, which banks are heavily dependent on, are not functioning normally yet and capital injections to banks, though promised by the authorities, would take time to finalise, he said.
He also expects Singapore to not reach earlier estimates of 3 percent economic growth in light of the current technical recession, and at best there would be zero growth next year.
Dr Tan has doubts that the integrated resorts would be in full operation as scheduled in 2009. But the full impact of the IR-driven tourism qrowth expected in the second quarter of 2010 would provide the needed economic stimulus and jobs for Singapore's economy, he said.
NBS Dean Dr Jitendra Singh was also positive about the times ahead.
“In many ways it would appear that the worst is behind us now,” he said, referring to September's market crash, which registered the steepest drops in global markets since 1997's Asian Financial Crisis.
Governments working in a coordinated fashion like European governments’ concerted efforts to save their banks, was also what Dr Singh called “a step in the right direction" to restoring investor confidence.
Another finance professor, Dr Low Buen Sin, said local banks’ prudent risk management policies, often conservative in comparison to foreign banks, may better withstand shocks in times of crises.
Besides talk about local banks, the panel discussion also touched on general tips for investors amidst market volatility.
Finance Professor Dr Hwang Chuan-Yang suggested that short term investors might want to cash out of a fear-driven market, and long term investors would prefer to stay as it would be hard to re-enter the market again after withdrawing.
Business Professor Dr Suman Banerjee also commented on the collapse of major banks in America and its impact on the markets: ”Such unprecedented events only served to erode the credibility of large financial institutions and create a crisis of confidence amongst investors.”
During the panel, the professors also allayed fears of students, especially on the topic of employment.
Dr Tan said the integrated resorts will boost employment in service sectors, and added in jest that NBS is the top business school in Singapore and undergraduates therefore need not worry.
Shao Bing Chu, 23, a second-year Electrical and Electronic Engineering student, said: "Now at least I have some background on the financial crisis, its causes and its effects. This knowledge will come in useful when I go into the job market in one or two years' time."
But second-year business student Manish Nandwani, 22, wished the speakers had addressed the Lehman Brothers minibonds issue in greater detail.
He said. “Selling financial products will be part of our job in the future and I wanted to know how things might change after this incident.”
However, Shao felt the million-dollar question on everybody's minds was when this financial crisis will end.
"Let's hope that things get better especially when we graduate and go into the job market," he said.
