This year has been a torrid year for many investors, with stock and bond prices falling sharply amid a myriad of concerns ranging from rising inflation and interest rates to the ongoing war in Ukraine.

Although financial markets have stabilised recently, the near-term outlook remains uncertain with debate continuing over when inflation will peak and if the world will slip into a recession. What’s clearer is that the process of digital transformation will continue along with the fight against global warming. 

These enduring trends may even pick up pace in coming years as governments and companies respond to the pressing challenges facing the world today.

“The Covid-19 crisis, the ongoing Russia-Ukraine conflict and the sustainability revolution are reshaping the world as we know it. All these transitions bring change, uncertainty and even possibly some risk. But if managed well, they can also bring opportunity,” said Mr Anurag Mathur, Head of Wealth and Personal Banking at HSBC Singapore.

“We remain hopeful for what the future holds, and HSBC stands ready to continue on this journey with our clients by turning disruptions into pathways for growth and opportunity,” he said at a recent dinner conference organised by the Business Times in partnership with HSBC Premier. 

The two-hour hybrid event, titled “Investment outlook in a disrupted market”, featured speakers including Mr Saurabh Dhingra, Partner and Asean Financial Services Strategy Leader at EY-Parthenon; and Mr Tan Kee Wee, Founder and Principal Economist at Waveney Economics.

Digitalisation and the Metaverse

Keynote speaker Mr James Cheo, Chief Investment Officer, Southeast Asia, HSBC Global Private Banking and Wealth, said that while forecasts for inflation and interest rates vary among different analysts, there is greater certainty about the forces that will shape the world in coming years. 

One of the trends is digitalisation, which has gained pace due to Covid-19.

Digitalisation refers to the conversion of information into the digital format to enable easier exchange of information over the Internet. The benefits include smoother business processes and the ability to work remotely.

Many people, for instance, are now familiar with video conferencing tools such as Zoom and interacting with one another virtually instead of meeting face-to-face. Zoom, however, is just the tip of the digital iceberg, according to Mr Cheo.

“Zoom’s interaction is very much two-dimensional. That level of interaction is not as great or as engaging as we would like. It will see greater evolution as we enter into the new world of the Metaverse, where the virtual and reality come together. I think this is going to be the future of work and play,” he added. 

“The trend towards the metaverse relies on a confluence of technologies. You need the blockchain, software that can create more engaging digital content, 5G, cloud computing and the Internet of Things.” 

Mr Dhingra said companies that had transformed themselves digitally have seen much higher returns compared with businesses that had not.