SINGAPORE investors think technological advances will be the most significant driver of change for the businesses they invest in – ahead of factors such as government regulation, geopolitics, supply chain instability, and changes in customer preferences.
In fact, more than half expect generative artificial intelligence (AI) to boost productivity, revenue, and profitability for the companies they invest in, based on the PwC 2024 Global Investor Survey released on Wednesday (Dec 4).
Investors also do not perceive trade-offs between AI and employees, the survey found.
PwC Singapore deputy markets leader Patrick Yeo said: “Rather than a zero-sum game, our survey also reveals investors’ expectations on businesses to upskill their workforce in tandem with investments in AI.”
Notably, 84 per cent of respondents investing in Singapore believe that businesses should invest in upskilling their workers. Nearly a third expect AI to raise headcounts by 5 per cent or more, while 36 per cent expect the technology to bring little to no change to headcounts.
Around half of the Singapore investors surveyed expect the economy to grow over the next 12 months.
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When asked about the most pressing investor concerns, 51 per cent of the respondents investing in Singapore ranked macroeconomic volatility as the foremost worry, followed by cyber risks and geopolitical conflict.
Global investors ranked cyber risks and geopolitical conflict as their top concerns.
Climate action and sustainability
The survey also found that climate action is a priority among Singapore investors, as 71 per cent said they would moderately or significantly increase their investments in companies that take a range of climate-related actions.
When assessing companies’ net-zero transition plans, slightly more than two-thirds of respondents agreed that governance alongside associated capital or operating expenditures are very, or extremely, important.
More than three-quarters said that companies should incorporate environmental, social and governance priorities directly into their corporate strategies.
However, most Singapore investors feel that more should be done on the sustainability reporting front.
Significantly, seven in 10 said sustainability reports should have a level of detail comparable to financial audits. Meanwhile, 54 per cent agreed that corporate reporting on companies’ sustainability performances tend to contain unsupported claims.
When sourcing information to assess companies, 55 per cent of Singapore investors said AI helps them analyse the information published by companies.
While financial statements and note disclosures, followed by materiality disclosures, emerged as the top sources of information that investors rely on, most reported using multiple sources of information to assess companies.
Notably, Singapore investors value a wide range of data beyond financial information – including data on cybersecurity and data privacy, supply chain management, corporate governance, and innovation.
