Opportunities don’t just come
about. They require the right
analysis at the right time.

The coronavirus pandemic has led to extreme volatility on the stock markets. When there is turbulence on the stock markets, it is difficult for investors to remain calm and stick to their strategy. Phases of volatility certainly offer oppor­tunities that can be tapped into.

Tan Zhi Qiang, Relationship Manager at VP Bank Ltd Singapore Branch, explains in an interview how he actively accompanies his clients through phases of market volatility and develops attractive investment solutions for them.

Due to the coronavirus pandemic, equity prices around the world went into freefall last March. How did you advise your clients during such periods of market volatility?

Every client is unique, and we contacted each one to discuss the market situation as well as the impact on their portfolio. We re­assessed each clients’ risk appetite and asked questions about their business and other investments. This made it possible for us to determine how much risk the clients are willing to tolerate, and we adjusted each portfolio accordingly. In the midst of the turmoil, we worked tirelessly to find investment opportunities for our clients. The highest priority was to maintain regular contact with clients, particularly in these trying times.

How did you guide your clients through the turmoil of the coronavirus pandemic?

As has already been shown in many studies, it is not a question of when to invest; instead, what really matters is if you invest at all. In such volatile markets, active management is crucial – whether in terms of seeking out advice, portfolio structuring, portfolio design or selection of securities. In phases of market volatility, our portfolio managers are constantly on the lookout for investment opportunities. It is crucial to maintain proximity to the clients’ needs and remain in close contact with them.

In phases of market volatility,
our portfolio managers are
constantly on the lookout for
investment opportunities.

We are fully committed to providing the best possible customer service, including informing our clients on an ongoing basis about the latest findings of our experts in investment matters in particular. We also embraced the new normal and made use of various tools for maintaining contact with clients, such as conference calls with investment specialists, Zoom meetings for personal discussions, and investment seminars involving various experts that were organised for clients on a biweekly basis by VP Bank Singapore.

What do investors need to keep in mind when the market is volatile?

Opportunities can be created by taking advantage of market volatility and making or liquida­ting investments, but such moves are risky. The market is becoming more and more complex over time, and even the experts are finding it increasingly difficult to predict market trends. Investors should be aware of economic cycles and how certain events affect investment per­formance and returns. Equities have also gone through turbulent times in the past, but they have always recovered and generated higher returns than money market investments over the long term.

What strategies have you recommended to your clients?

The strategies varied and were subject to rapid change in the face of this unpre­cedented crisis. In the initial phase of the sell-off, the credit spreads on bonds from top-tier countries and blue-chip companies were greater than usual. This represented an excellent buying opportu­nity for clients with a certain appetite for risk. The inclusion of gold in portfolios was also important as a hedge. The massive stimulus measures by the Federal Reserve and governments quickly shifted the focus to equities, in particular to companies with solid fundamentals and balance sheets. As the crisis wore on, we also recognised that technology stocks would become more important, leading to a sector rotation from value equities to growth stocks. Changing consumer behaviour and regulations facilitating work from home in many countries encouraged us to include tech stocks in portfolios.

How do the clients benefit from the expertise of VP Bank Ltd Singapore Branch?

Our expert teams feature many years of experience and wide-ranging expertise. In addition, our determination to implement the client’s ideas contributes to the achievement of the client’s objectives. Short reporting lines, clear responsibilities and efficient interfaces are the basis for success. VP Bank Singapore is known for proximity to the market and great expertise – a reliable combination for tailored investment concepts and extraordinary investment ideas.

VP Bank Ltd Singapore Branch
is known for tailored investment
concepts and extraordinary
investment ideas.

We also recognised that clients were largely at home, so we wanted to add value by organising investment talks with experts from a variety of fields every two weeks in order to keep clients up to date on the latest changes and innovations in the market.

Has the relation­ship with clients changed in the coronavirus pandemic?

The way we see ourselves as client advisors is reflected in our high standards of customer service, regard­less of the effect of the COVID-19 crisis: We never leave our clients out in the cold. We want to be a reliable partner at all times and to strengthen our cooperation even further in times of great difficulty. This has always proved to be the right principle for us to follow. If the client notices that we provide them with reliable support even in times of turbulence, we will experience greater client loyalty and partnership in the years to come.

What is the market outlook in Asia today?

China is particularly well positioned and is the first country in Asia to visibly recover from the coronavirus pandemic. The COVID-19 crisis brought China’s growth to an abrupt halt – as was the case with the growth of most other countries in the world. However, there are now signs that China will be one of the first countries to emerge from recession and return to its path of long-term growth. Economic activity has almost returned to pre-crisis levels. In addition to China, immediate neighbours such as Taiwan and South Korea are also well positioned for recovery. China is still on track to become the world’s largest economy by 2030 – despite the impact of the coronavirus pandemic. This is associated with great opportunities for investors as well as for VP Bank.