8 April 2025

Last Thursday, I listened to a Singaporean Member of Parliament talk about the tariffs, 16 hours after Trump introduced the tariffs. He shared a lot of economic theories, but what struck me was how he pointed out that this wasn’t new.

Every few hundred years, there’s the rise of a new global power.

But what this also means is that there’s a fall in the power in existence. No one knows how long this transfer of power will be, but there will definitely be some grief and tantrums thrown.

When you can’t depend on trade, you turn to war

Before the Second World War, there was the Great Depression. And when countries cannot depend on trade, they rely on war.

None of this bodes well for a global economy, nor does it bode well for a small, open economy like Singapore.

So how do you win in a circumstance like this?

Singapore as a flight to safety for financial capital

The role of economies like Singapore who keep to their commitments cannot be understated. And in uncertain times like this, trust often is the most difficult currency to build.

But trust, if you happen to have a lot of it stored over the years, reaps exponential returns.

The politician pointed out about how during the 1980 oil crisis, Singapore’s government did not seize the oil assets on Pulau Bukom, instead letting Shell continue to operate its refineries, with confidence.

In this respect, investors will continue to look to governments that can say what they do, and do what they say, and will park their monies with banks that can demonstrate that reliability.

Out of the 3 local banks, if I had to pick one that would benefit the most from this, it would probably be OCBC, because of its (don’t laugh) focus on organisational development.

Tong Yee, who is a guru in the field of organisational development, has been doing a lot of work with OCBC around its transformation. You might laugh about how one man can shape a bank, but enter one of Yee’s classes, and you would understand why.

In one recent workshop I attended with him, to help us better understand the unexpressed rage that could go on in organisations, he threw a chair across the training room (in his house, in his house, mind you), to replicate what he experienced during a workshop he conducted for a leading hospitality group.

If you’ve ever worked in an organisation, seen the politics, you would be aware of how much this affects Being aware of the organisational dynamics that goes on behind the many

Singapore stimulating its own economy through construction

What I think is also often missed as a global investor is that Singapore does stimulate alot of its local economy, and one shouldn’t downplay just how much they do that.

Below, you can see the SINGA Debt Programme, which the Government started to capitalize its expenditures over generations, rather than putting it under a single term’s expenditure.

Just 2023 alone was $77b, and it’s estimated that 2024 will reach $180b.

Sure, one could argue that the bulk of these large scale infrastructure projects like the Jurong Line, is spent on global construction companies like Samsung.

But what one ignores is how companies like OKP have truly carved out a sizable margin from the simpler road works.

2 weeks ago, I was at the opening of a sheltered walkway around Fareer Park MRT when I chanced upon the CEO of OKP, Mr Or, and speaking to him, he told me that he had recently won quite a few of these sheltered projects, and these were being rushed out because of the pending elections.

A discomforting play

The elections is a big thing in Singapore, and more and more people are paying attention to how the Government will change (or not change), to have certainty at the negotiating table.

One play I think might work is how China might integrate the ASEAN and Asian trading partners more closely, to insulate itself from the US.

One proxy to that play is Yangzijiang Financial, who finances Chinese businesses.

How it works out, is a question mark, but I have confidence that China will lean tighter to its ASEAN trading partners.

But I’m prepared to lose money on this.

What’s not going to change

Ultimately, I still love one of Bezos’ quotes.

“I very frequently get the question: 'What's going to change in the next 10 years?'

And that is a very interesting question; it's a very common one.

I almost never get the question: 'What's not going to change in the next 10 years?' And I submit to you that that second question is actually the more important of the two -- because you can build a business strategy around the things that are stable in time. ... In our retail business, we know that customers want low prices, and I know that's going to be true 10 years from now. They want fast delivery; they want vast selection.

It's impossible to imagine a future 10 years from now where a customer comes up and says, 'Jeff I love Amazon; I just wish the prices were a little higher,' or 'I love Amazon; I just wish you'd deliver a little more slowly.'

Impossible. And so the effort we put into those things, spinning those things up, we know the energy we put into it today will still be paying off dividends for our customers 10 years from now.

When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.”

What’s true over the long term

I want to close with this poem from Yeats.

The Second Coming

Turning and turning in the widening gyre
The falcon cannot hear the falconer;

Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world,

The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;

The best lack all conviction, while the worst
Are full of passionate intensity.

There will always be war, and rumors of war. There will continue to be passionate men in charge of countries.

But what I’m betting won’t change is this:

1. The continued trust in Singapore’s brand
2. Singapore’s propensity to plan for when things go to shit, and to deploy its trillions in reserves to stimulate its own economy through infrastructure
3. The continued need for people to eat, drink, and shit
4. The need for money to continue flowing

The too long didn’t read and how this translates to the actions I take?

1. Buy consumer defensives like Sheng Siong and coffee producer Food Empire
2. Buy Singaporean banks, any one of them
3. Buy industrials that make infrastructure possible like Hong Leong Asia, and concrete mixer Pan-United