In Singapore, foreign currency worth record US$19.2 billion deposited in April, due to Covid-19, HK protests and trade war

Since then, the amount has gradually increased every month, passing the S$20 billion mark in January to hit S$21.6 billion, before reaching April’s all-time high.

“Certainly Singapore saw inflows while Hong Kong saw outflows,” she said.

Pan Jingyi, a market strategist at IG Singapore, said the protests, which continued through the second half of 2019, underpinned investors’ search for safe havens. Singapore is generally regarded as one such safe haven in Asia, given its reputation as a financial centre with strong government fundamentals, she added.

Another factor that led investors to park their funds in Singapore was the trade war between the US and China, which drove many companies to relocate some of their operations from China to Southeast Asia, said Jack Wang, a partner in a fund management company. This resulted in capital moving to Singapore, due to its position as the financial centre of the region, Wang said.

He added that currency fluctuations in emerging markets, such as Indonesia and China, may have triggered some capital flight to Singapore.

The Covid-19 pandemic, which started hitting countries besides China in February, has created further risk aversion among investors in Asia, Gold said.

“The Singapore banks are the only banks in the Asia-Pacifc region we rate stand-alone in the double ‘AA’ range and therefore more likely to attract funds in times of stress,” she said.

‘AA’ ratings indicate a financial institution has a very low risk of defaulting, based on Fitch’s assessment.

Measures undertaken in Singapore to tackle the pandemic could also be another factor, Pan said.

“Early efficient handling of the matter coupled with a series of strong fiscal injections had likely only boosted the city state’s allure,” said.

The Singaporean government has rolled out four budgets this year to support businesses and workers affected by Covid-19.