Rising affluence and a strong savings culture, coupled with increasing financial sophistication, will mean more Asians moving away from speculation in property and stocks, towards more systematic planning for wealth enhancement through a globally diversified portfolio of assets. 34. There are now more high net worth individuals in the Asia Pacific than in Europe. And they are younger – 41% of the high net worth individuals in the Asia Pacific are aged 45 years and below, compared to only 10% in North America. They have a longer time span for wealth accumulation, and a more global outlook in their investment strategies. At the same time, Asians are living longer and more Asian countries are seeing the need for welldesigned pension systems to provide adequate retirement incomes for their people. These pension funds will require professional management. 35. In the same vein, I expect the demand from the official sector for Asian financial assets to grow. Central banks and sovereign wealth funds will likely look to allocate more funds to Asian markets, both to diversify risk and to enhance returns. Speaking for the MAS, we have always invested our official foreign reserves in a highly diversified global portfolio. As Asian markets develop in depth and sophistication, our allocation to emerging markets, especially in Asia, will grow. 36. To be sure, asset management in Asia is not a one-way bet. Asian markets are more fragmented and harder to operate in, compared to the advanced economies.
Ravi Menon: Forces driving the global economic outlook Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Investment Management Association of Singapore 13th Annual Conference, Singapore, 14 March 2012. *  *  *  Mr Lester Gray, Chairman of IMAS, Distinguished guests, ladies and gentlemen, good morning. A. Fragile equilibrium  1. The world economy appears to have found a fragile equilibrium. There are weaknesses in key economies balanced by pockets of growth elsewhere. More notably, the worst fears of the last three months of 2011 have not materialised. The last six weeks in particular have shown signs that the global economy has avoided imminent disaster. 2. In the Eurozone, the threat of a major crisis has receded, at least for now.   A deal has been struck on the second Greek bailout package, allaying fears of a messy default situation.   The ECB’s two tranches of Long-Term Refinancing Operation, or LTRO, amounting to more than 1 trillion Euros, has provided Eurozone banks much needed liquidity to meet their funding needs.   The LTRO has also helped to compress sovereign yields significantly, particularly at the front end of the yield curve. 3. In the United States, the risk of a double dip recession has waned.   Employment data have surprised on the upside.   New orders for both manufacturing and non-manufacturing continue to indicate higher levels of activity for the next six months. 4.