‘Many happy returns’, or more of a refuge?

When KPMG executive Anton Ruddenklau moved to high-rise Singapore from the leafy streets of a London commuter town, one of the first things he noticed was how easy it was to do business in the Southeast Asian nation.

“People are set up to build relationships here,” he told CNBC by phone.

It was January 2021, and Ruddenklau moved to Singapore to lead KPMG’s financial services advisory practice in the country. “You arrive and you realize that actually the government has a nation-building mindset that’s hugely enabling,” he said.

And, while Ruddenklau said Singapore as a market by itself is “not particularly interesting,” because of its small population, investors like it for its location, English common-law and large private capital markets, he added, describing it as a “hub” for capital flows into and out of Asia.

The level of foreign direct investment (FDI) in Singapore as a percentage of GDP is one of the highest in the world, according to the World Bank, with many international investors seeing the country as something of a refuge.

“A big reason Singapore attracts overseas investors is credibility,” according to Geoff Howie, a market strategist at the city-state’s stock exchange SGX Group. “It offers policy stability, strong institutions, deep trade and financial connectivity, and a currency that is increasingly seen as an anchor of macro discipline rather than a swing factor,” he told CNBC by email.

Indeed, the Singapore dollar hit its highest level against the U.S. dollar since October 2014 this week. As of Wednesday, it was trading at about 1.26.

In the five years that Ruddenklau has lived in Singapore, he’s observed it move away from being a “little red dot” — an affectionate, colloquial term referring to its size on the map — to something much more. Now it is “much more of a globally significant middle power,” Ruddenklau said, referring to a term Canadian Prime Minister Mark Carney used last week to describe his own country.

Tian Ong Foo, regional head and Singapore location head of Private Banking at Standard Chartered, told CNBC via email that the island nation is a “strategic base” to invest in markets like Indonesia, Malaysia and Thailand, “without taking on operational and regulatory complexity of those markets directly.” Super app Grab, for example, is run out of Singapore and operates in seven other countries in the region including Vietnam, Thailand and the Philippines.

“Compared to other hubs, it provides lower geopolitical risk, strong regulatory clarity, and a mature financial ecosystem,” Foo said.

Srini Nagarajan, managing director and head of Asia at British International Investment (BII), the U.K.’s impact investment body, described Singapore as the “perfect place” from which to invest into emerging economies in the region.