Investment Analysis Report: Evaluating Investment in India & Singapore

This report provides a comprehensive analysis of investment opportunities in India and Singapore. It begins with an introduction outlining the objectives of investors and the importance of rate of return. The report then delves into detailed analyses of both countries, covering their political and economic histories, current stability, economic forecasts, and expected growth. For Singapore, the report highlights its status as a global commercial and financial hub, its human development index, tax advantages, and developed economy. The investment performance of major asset classes is also examined. Similarly, for India, the report discusses its political and economic history, economy, workforce, major industries, and external trade. The investment performance of major asset classes in India is also assessed. The report concludes with a comparison of the advantages and disadvantages of establishing an international fund, providing a well-rounded perspective on the investment potential of both countries.

Running head: INVESTMENT ANALYSIS
Investment Analysis
Name of the Student:
Name of the University:
Authors Note:

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INVESTMENT ANALYSIS
Table of Contents
Introduction:....................................................................................................................................2
Singapore:........................................................................................................................................3
Political and economic histories:.................................................................................................3
Global commercial and financial hub:.........................................................................................4
Human development index:.........................................................................................................4
Tax heaven status of the country:................................................................................................4
Developed economy of the country:............................................................................................5
Other positive aspects of the economy:.......................................................................................7
Investment performance of the major classes of investments.....................................................8
India:................................................................................................................................................9
Political and economic history:...................................................................................................9
Economy of the country:...........................................................................................................10
Second largest work force in the globe:....................................................................................11
Major industries in the country:.................................................................................................12
External trade and its impact in the overall GDP of the country:..............................................13
Share in world trade:..................................................................................................................13
GDP at purchasing power parity estimation:.............................................................................13
Industries:..................................................................................................................................13
Investment performance of the major classes of assets.............................................................14

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INVESTMENT ANALYSIS
Advantages and disadvantage of establishing an international fund:............................................14
Conclusions:..................................................................................................................................15
Reference.......................................................................................................................................16

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Introduction:
In this report an attempt is made to analyse the future opportunities that can be gained by
forming international fund and investing in international economy. In the report the list of
objectives of investors are prepared then the rate of return will be assessed as the most important
objective of all. Accordingly, in this document the investing company is looking to invest the
funds of its client in attractive investment options even if that means to go international by
investing in securities and shares in emerging markets (DeFusco et al. 2015). The two countries
which have been selected for the invest purpose in this documents are the two Asian giants, i.e.
India and Singapore. Both these countries present attractive opportunities to global investors as
these are two of the most promising countries as far as the bright economies are concerned. An
in-depth analysis shall be provided to outline the scope of investment opportunities in these two
countries by discussing the following aspects of the two countries:
 Political and economic histories.
 Current stability in the two countries from politician and economic stand point.
 Economic forecasts.
 The expected economic growth in the two countries.
Singapore:
Political and economic histories:
Situated in Southeast Asia the Republic of Singapore, better known as Singapore only, is
a sovereign city state and island country. The country became a separate sovereign nation in
1965 after separation from Malaysia over ideological differences. However, despite lack of
natural resources the country has emerged as an Asian Tiger as far as the economy of the country
is concerned and it has become possible due to a strong political leadership of the country. The

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INVESTMENT ANALYSIS
country has not experienced any major political crisis in recent memory to infuse further
confidence to the proposed investors around the globe (Aouni et al. 2014).
Global commercial and financial hub:
It is a global commercial, financial and transport hub with the recognition of
technologically most ready country in the globe. The country is also recognized to have a city
with best investment potential in the form of Singapore city and also one of the most competitive
country in whole wide world. The country is also boosted off with third largest foreign exchange
market and third largest oil refining and trade centre in the globe (Sahin et al. 2017). The
standard of education provided in the country is recognized and ranked very highly around the
globe. Healthcare facility provided in the country is also of world class and highly appreciated by
the UN and the world. The life expectancy, quality of life and personal safety in the country are
also of very high standards to further prove the efficiency of able political leadership of the
country.
Human development index:
In the human development index the country currently ranks fifth in the whole world with
recognition from the United Nations (UN) in the Human Development Index. The country’s
economic prosperity can be better understood from the fact that the country currently has 3rd
highest Gross Domestic Products (GDP) per capita. The economic progress and prosperity in the
country is visible from the fact that almost 90% of the homes in the country are owner occupied
which is by far the highest rate of owner occupied homes in any part of the world. Over the years
the economic progress of the country however, has also contributed to the ever growing income
inequality in the country (Kashyap 2016).

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Tax heaven status of the country:
The country has also been recognized as a tax heaven as the rate of tax is almost nil in the
country which is a further motivation for the investors to invest in the country. Only 38% of the
total population of 5.6 million of Singapore is its permanent residents and the rest is foreign
national who have all made the country their permanent home due to the desirable tax structure
of the country (Ayub et al. 2015).
Figure 1: Falling unemployment rate in the country
(Source: Tradeeconomics.com, 2018)
Developed economy of the country:
A highly developed economy, Singapore is originally one of the four Asian Tiger along
with Hong Kong, South Korea and Taiwan. However, with the ever developing economy

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INVESTMENT ANALYSIS
Singapore has surpassed its peers in GDP per capita. The country experienced an amazing 6%
growth in average over a 30 year period between the year 1965 and 1995. As a result of such
prolonged growth the standard of living and population of the country were transformed for the
betterment (Morecroft 2018). The economy of the country is recognized as one of the freest
around the globe due to the relatively lower compliance requirements with different rules and
regulations. The country has taken huge steps to establish itself as one of the most innovative
countries around the globe with use of advanced and innovative technology. In fact in the year
2015 the country was ranked as the second freest country to do business according to the Ease of
Doing Business Index. Despite being recognized as a tax heaven the country has consistently
ranked as one of the least corrupted country in the whole world.
Figure 2: Singapore GDP

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(Source: created by Author)
Other positive aspects of the economy:
The country has also got the distinction of being the single Asian country to get AAA
credit rating for several years to indicate the ever growing confidence of the creditors and lenders
on the ability of the country to repay its loans and debts. The skilled and qualified workforce of
the country attracts large amount of foreign investments. The location of the country and the low
tax rates are two other factors which attract investors from different parts of the globe to invest in
the economy of the country (Guerard et al. 2015).
Figure 3: Growth rate

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(Source: Morecroft 2018)
A look at the table below will help us to understand the growth and development of the
country’s economy in recent past to understand the actual development and progress of the
economy of the country (Najeeb et al. 2015).
year GDP GDP GDP Real GNI GNI Foreign Avg.
Nominal Nominal (Billion) Nominal Nominal Reserves Exchange
Rate
(Billion) Per
Capita
(Billion) Per
Capita
(Billion) (1US$ to S$
)
201
1
S$346.35
3
S$66,816 S$342.37
1
S$338.45
2
S$65,29
2
S$373.96
0
S$1.2573
201
2
S$362.33
2
S$68,205 S$354.06
1
S$351.76
5
S$66,21
6
S$324.08
1
S$1.2498
201
3
S$378.20
0
S$70,047 S$324.59
2
S$366.61
8
S$67,90
2
S$344.72
9
S$1.2513
201
4
S$390.08
9
S$71,318 S$380.58
5
S$378.32
9
S$69,16
8
S$340.43
8
S$1.2671

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Investment performance of the major classes of investments
The urge for higher return have lead many investors to turn attention to the emerging
economies. In the current year the benchmark index of Singapore Strait Times index has shown a
growth of 13%. The strong fiscal position and the political stability of the country are the major
reasons for the attractiveness of the investment.
The 10 year government bond yield of Singapore is around 2.07 on a general comparison
it can be said that the bond has provided sufficient return. Therefore, it can be seen that it is
profitable for the investor to make investment in the government bond as there will be growth in
earnings (Rezende and Gonçalves 2017).
On analysing the year to year performance it can be said that the best performance is the
SGD real estate bond. Though the return of these bonds has been relatively modest as compared
to the performance of the equity market but still it is providing sufficient return to the investor.
India:
Being the seventh largest country in terms of area and second largest in terms of
population, India is a country of diverse culture and tradition. Located in the South Asia the
country has come to its own as far as its economy by the end of 20th century (Davis et al. 2016).
As already mentioned that the country is a diverse country with number of complexities
however, the high economic growth of the country in recent past the bright forecasts of its
economy have made it a hot destination in the eyes of the investors. Let us assess the political
and economic histories along with current political and economic situation to assess the
desirability quotient of the country as a investment destination (Kozlov and Shnyrenkov 2017).

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Political and economic history:
The country was ruled by the British for more than 200 years before it finally got
independence from the rule of the British in 1947 after a prolonged battle of freedom movement.
At the time of its independence, i.e. in 1947 the country’s economy was dire state however with
each passing year the country has got stronger. The country economy opened its door to the
global market forces in the year 1991 after its general budget decided to allow foreign direct
investment in the country to improve the overall economy of the country. Since 1947 the
political establishments of the country has provided a solid foundation to the economy for
development and progress. Barring few controversial political issues the country has more or less
remained stable and the whole credit for the same goes to the political establishments of the
country (Luo and Wu 2016). There has no political turmoil in the country to suggest that there is
any risk of investing in the country. The country is the world largest democracy which allows
people to express their freedom and take action according to their needs without any restriction.
Thus, the political establishment in the country provide a suitable investing environment for the
investors.
Economy of the country:
According to the information provided by the International Monetary Fund (IMF) about
the economy of the country, it is the sixth largest economy in the whole wide world in terms of
market exchange rate. In terms of market exchange rate the economy of the country is worth of
US dollar 2.454 trillion. In terms of purchasing power parity the country is ranked as the third
largest country in the whole world by US dollar 9.489 trillion (Davis et al. 2016). The country is
one of the fastest growing economy in the world with 5.8% annual average rate of growth during

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INVESTMENT ANALYSIS
the last two decades and in fact the growth rate increased in 2011-12 from the average growth
rate of last two decade to 6.1% to further improve the credibility of the country’s economy.
Figure 4: GDP
(Source: Sánchez 2015)
Second largest work force in the globe:
As of 2016 the country has the second largest work force in the world with 513.7 million
workers. However, the country ranks poor 140th and 129th in GDP per capital and GDP per
capital in purchasing power parity respectively. The GDP of the country is divided in service

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INVESTMENT ANALYSIS
sector, industrial sector and agriculture with service sector contributing major portion of the total
GDP of the country (Sánchez 2015). In fact as on 2016 the service sector of the country
contributes approximately 55.6% of the total GDP with 26.3% of the contribution coming from
industrial sector and the balance 18.1% contribution from agricultural sector in the country.
Figure 5: Unemployment rate in the country.
(Source: Sánchez 2015)
Major industries in the country:
Major industries in the country include textile, chemicals, telecommunication,
pharmaceuticals, biotechnology, oilseed, cotton, jute, tea, potatoes, sugarcane, machinery,
software technology, mining, automobile industry, cement and food processing (Raudys et al.

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INVESTMENT ANALYSIS
2014). The investors can invest any of the above major industries to earn significant return from
their investments.
External trade and its impact in the overall GDP of the country:
The share of external trade has increased significantly over the years to exceed 24% of
the country’s overall GDP as of 2006. In the year 1985 the country’s external trade stood at
merely 6% of the GDP of the country.
Share in world trade:
The share of world trade of the country is merely 1.68% however, the country was also
recognized as the tenth largest importer in the world as per the import data of 2011. In the same
year the data showed that the country was the nineteenth largest exporter in the globe (Bubeck et
al. 2015).
GDP at purchasing power parity estimation:
According to a report of the PricewaterhouseCoopers the GDP of the country at
purchasing power parity could overtake the GDP of the United States of America by the end of
year 2045. Even at the time of global slowdown and when the most economies are contracting
the expected annual average GDP growth rate of 8% has attract the attention of the investors
from different parts of the globe (Betschinger 2015).
Industries:
The telecommunication industry in the country has added 227 million subscriber in the
period of 2010-11 to register as the fastest growing industry in the world. The automotive
industry in the country is the second fastest growing industry in the world. The automotive
industry has registered a 26% annual growth in the year 2009-10.

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Investment performance of the major classes of assets
The golden rule of building an efficient investment portfolio is to include the fixed
income product like the fixed interest bearing bond. The fixed income debt fund have certain
advantages so the investor should make investment in this securities (Bubeck et al. 2015). The
performance of the debt securities are provided below and to summarise the performance it can
be said that the Indian bond market has shown growth. On analysis it can be seen that the bond
market is dominated by the government securities so the fiscal policy plays an important role in
the bond market. The equity market in the current year has shown a growth of 15% so it can be
said that the investor could make investment in the equity market (Raudys et al. 2014).
Advantages and disadvantage of establishing an international fund:
The advantages that can be highlighted for establishing the international fund on the selected
countries like Singapore and India are the following:
I. To invest in attractive destinations to earn high rate of return on investment.
II. To avail the benefits of tax provisions in different parts of the globe.
III. To reduce the tax liability by investing in tax heaven destinations.
IV. To expand the investment scopes and opportunities.
V. To reduce the minimum expenditures.
The disadvantages that can be highlighted for establishing investment fund are the following:
I. Complex rules and regulations to adhere to.
II. Unknown investment environment.
III. Increase amount of cost of investment.
IV. The risk of investment is much higher.

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INVESTMENT ANALYSIS
Conclusions:
Taking into consideration the immense prospect of the two countries and their economies
these provide attractive opportunity to the investors to establish international fund to invest in the
different industries, securities and stocks in India and Singapore. The opportunity however come
with specific risks which have to be dealt with properly to ensure that establishment of
international fund to invest in these two markets prove to be fruitful and useful for the investors.
Therefore based on the above discussion it can be recommended that the company should
develop appropriate measures for controlling risks and should develop funds form investment for
making investment in different sectors of the economy.

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