Navigating super trends: Bank of Singapore's Ranjit Khanna on AI, geopolitics and Asia's rise

Gulf Business

21-03-2025

Image: Supplied
In an exclusive interview, Ranjit Khanna, head of Private Banking, Europe and Middle East and chief executive,
CIO Summit: 2025 Supertrends
held recently in Dubai.
He discusses how shifting geopolitical landscapes, rapid technological advancements like AI, and the urgent need for sustainable investing are reshaping investment strategies for high-net-worth individuals and institutional investors.
Khanna also offers insights into Asia's burgeoning opportunities and the evolving role of private banking in a complex global economy.
What are the key themes and insights from the recent
CI
O Summit: 2025 Supertrends
, and how do they reflect the shifting global economic landscape? How are factors such as geopolitics, macroeconomic policies, and technological innovations shaping investment strategies for high-net-worth individuals and institutional investors?
The five key themes are – the changing world order, activating asset allocation, finding artificial intelligence in real life, powering ahead and living 2.0. These are themes related to geopolitics, macroeconomic policy, investment, technology, and environmental and social dilemmas of our time.
These 'Supertrends' will be the foundation to the way we construct portfolios and evaluate investments across asset classes, geographies and sectors.
With ongoing geopolitical tensions, de-globalisation trends, and central bank policy shifts, how is the Bank of Singapore advising clients on asset allocation in 2025? How do you view the future of the US
dollar as a reserve currency, and what investment opportunities are emerging in Asia's key markets, including China, India, and Southeast Asia?
The fragmented world investors face after the shocks of the pandemic, the crises in Ukraine and the Middle East, and the US-China rivalry is likely to fracture even more under the second Trump term. Tax cuts, steep tariffs, tight immigration and easier regulation – these are already happening. Inflation is set to prevail.
However, despite near-term uncertainties, we believe that the global growth and earnings outlook appear broadly resilience, which underpins an overall risk-on stance in our tactical asset allocation strategy. We hold an overall 'Overweight' stance in equities, expressed through Overweight positions in US and Asia ex-Japan equities, and Neutral positions in Europe and Japan. We adopt an overall 'Underweight' stance in fixed income, with 'Neutral' positions in DM High Yield (HY), Emerging Markets (EM) IG and EM HY bonds, and Underweight positions in USTs and DM IG bonds.
We believe the rally in Hong Kong and China is broadly durable and has more legs. Although China's economic outlook remains weak, there are nascent signs that the situation may have bottomed out.
In the real estate market, the magnitude of price declines has eased in recent months, while total sales value has also turned a corner. In addition, consumer confidence, which has been subdued over the past year, appears to be stabilising.
We see opportunities in promising emerging markets, such as India and Indonesia, due to their expanding middle class and global friendshoring trends.
Lastly, our view that gold prices could rise even with a strong USD in 2025 remains on track. Gold continues to defy the negative pull during bouts of USD strength and higher US real rates, extending a theme that has increasingly become evident in the last few years. We continue to see gold as an effective portfolio hedge and diversifier.
Artificial intelligence is transforming industries worldwide, but how is it specifically reshaping the financial sector? What are the biggest AI-driven investment opportunities in wealth management, and what risks should investors be mindful of when integrating AI into their portfolios?
We see AI uses cases focusing on broad internal employee productivity, revenue opportunities via customer facing applications as well as customer experience and engagement. When incorporating AI-related securities in portfolios, we believe it is important to be nimble in the face of various risks, such as chip export restrictions, cyclicality in aspects of businesses, monetisation strategies, and execution capabilities by management teams.
Sustainability and energy transition continue to be dominant themes in global investing. How is the Bank of Singapore incorporating ESG principles into investment strategies, and what role do Asia's markets play in the clean energy transition, given rising energy prices and supply chain disruptions?
We view ESG considerations to be crucial for investors, especially for those with a long-term perspective. Integrating ESG factors into investment decision-making can help identify risks and opportunities that traditional financial analysis may overlook, potentially enhancing portfolio resilience in the long run. Aligning investment outcomes with one's values to do good for the society and environment can also enable the betterment of our world.
To help clients understand how ESG factors impact their investment portfolios, we have published research content extensively on ESG topics in recent years. Since 2020, we partnered MSCI ESG research to include an MSCI ESG rating in all in-house company research reports. Our research analysts also factor in ESG considerations and commentary in their reports, taking into account sustainability risks and opportunities.
The global clean energy race is intensifying, with China and the European Union making significant advancements in renewable technologies. The US may strategically concentrate its efforts on sectors where it can still lead or catch up, ensuring that investments yield tangible benefits for the economy and energy security. This might involve fostering public-private partnerships that leverage innovation while also addressing the immediate needs of the workforce and industry.
In Asia, countries like Indonesia offer an opportunity as one of the world's largest carbon sinks. The country also boasts a rich reservoir of rare earth and minerals required in technological advancements. New investment opportunities are also emerging as Chinese companies leading in the energy transition are setting up more manufacturing facilities and infrastructure in other parts of Asia.
As demographic shifts, technological advancements, and healthcare innovations redefine industries, what are the most promising sectors for long-term investors? How are longevity-focused investments, biotech, and digital transformation influencing portfolio strategies in an era of rapid change?
While aging is a major structural trend influencing the outcomes for economy and markets, there are ample mechanisms for the economy to adjust to the challenges via mindset shifts, policy changes and targeted investing. As working age populations shrink, competition for skilled talent will intensify, spurring investment in automation and productivity-enhancing technologies.
While the world will see a greater need for static robots, more exciting growth will come from the combination of AI and robotics, for we are now entering a new era in which AI-robots and humanoids will be moving all around us.
In addition, declining populations have the potential to drive the need for re-skilling in the face of labour shortages, along with the rise of automation. This requires the technical expertise for jobs to evolve. Indeed, training, re-skilling and retaining talent is key to human capital strategy, and companies are noting the growing skills gap across industries which are hindering growth and advancement in their sectors.
As such, companies exposed to education, reskilling, retention and recruiting industries are likely to see greater demand for their services. Staffing and recruiting companies may benefit from helping firms navigate human capital gaps, while also helping to provide re-skilling services.
Given market volatilities and evolving risk factors, how should investors approach wealth preservation and growth in 2025? What are the key challenges and opportunities for private banking and wealth management firms in the coming years, particularly in Asia?
Markets are increasingly complex and challenging, making it essential for investors to ensure their portfolios remain resilient amid fluctuating macroeconomic conditions. Investors must be agile in exploring a range of solutions. At Bank of Singapore, we help clients evaluate these solutions to optimise risk and returns to achieve their wealth objectives. This means creating portfolios around their needs; with sufficient diversification through the wide array of investment products and solutions that we have available.
One of the central problems facing private wealth management in Asia and the Middle East has been the focus on short-term targets. As an industry, we have focused on short term growth as some private banks have been transaction-driven rather than adopt a sustainable strategy. We need to raise the bar as an industry and move from transaction-led to more asset allocation based to ensure proper risk-based diversification in portfolios.
Private banks are also face shifting client demographics and needs, and existing challenges around operations, technology, and talent management.
Clients are now looking for something extra from the private banks — guidance and direction on investments, family, philanthropy, retirement, succession and estate planning. It is less transaction focused and more sophisticated financial planning. Having the right infrastructure, range of solutions and people has hence become essential for private banks to succeed.
Particularly for Asia, where wealth has grown exponentially in the last couple of decades, this is Asia's time in the limelight as a region of investment and business opportunities, especially so given recent macroeconomic and geopolitical developments. As one of Asia's key gateway cities, Singapore has also grown into a very strong, leading global wealth management and business hub with a reputation for transparency and upholding the rule of law.
As a result, Singapore banks with their strong credit ratings have drawn strong interest from investors around the world. There is an opportunity here for us to take Bank of Singapore, a home-grown full-fledged private bank, to a larger, more global scale given Singapore's rise on the global stage.
Coupled with our three hubs in the leading global wealth hubs of
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