Global markets entered 2026 with strong momentum, supported by sustained equity gains and ample global liquidity, but investors now operate within clearer constraints that shape how risk and opportunity are assessed. Supportive financial conditions and positive returns remain in place, but they coexist with geopolitical fragmentation, policy limits and structural shifts that increasingly influence capital allocation and risk pricing. Confidence has not disappeared, but it has become more conditional, resting less on broad market momentum and more on the durability of economic conditions, political stability and institutional strength. These themes framed discussions at the OCBC Premier Private Client Investment Seminar 2026. In his opening remarks, Ian Yim, head of premier private client and premier banking Asia at Oversea-Chinese Banking Corporation (OCBC), noted that “markets have performed very well for the past three years,” before posing what he described as the “burning question” for investors: “Will the market continue to perform again in 2026?” He placed this question within “significant geopolitical and economic changes that have shaped the global landscape and introduced new complexities for investors,” reinforcing the need to position portfolios for durability rather than short-term gains. Liquidity, not sentiment, anchors the macro outlook This emphasis on durability appears most clearly in the role of liquidity, which continues to support markets despite elevated uncertainty. Selena Ling, chief economist and head of global markets research and strategy at OCBC, focused on policy conditions and financial system liquidity rather than investor sentiment, which can shift quickly with headlines. Ling described 2025 as “a watershed year,” noting that despite widespread concern around trade and political disruption, “tariffs and the longest United States (US) government shutdown did not cause a recession.” Market performance reinforced her view that “the key is to follow the liquidity,” since “when there is still ample liquidity, asset markets can still do relatively well even though there is a lot of geopolitical and economic uncertainty.” Access to credit and ongoing growth in money supply have cushioned asset prices, even as geopolitical risks remain prominent. Liquidity support, however, does not remove the need for judgement. Ling outlined a “fairly benign outlook” for 2026, expecting that “the Federal Reserve will at least cut rates once or twice,” easing borrowing costs across the global financial system. She cautioned that “markets have priced a lot of this dovishness in already.” Outcomes will therefore depend on how economic data, corporate earnings and inflation compare with expectations. Forecasts cited by OCBC indicating double-digit earnings growth suggest markets are not pricing an imminent earnings recession. Beyond the immediate cycle, Ling highlighted longer-term structural forces shaping returns. She described artificial intelligence (AI) as an adoption-led shift rather than an instant productivity breakthrough, noting that AI tools are already influencing daily workflows even as broader productivity gains remain uneven. “The AI story will have fundamental changes for the real economy in the medium term,” she said, warning that markets may experience volatility as expectations adjust. At a regional level, she pointed to the resilience of ASEAN, concluding that “Singapore is in a relatively sweet spot,” supported by above-trend growth, a recovering financial sector and strong visitor arrivals. Geopolitics defines the operating environment Liquidity and growth continue to provide support, but they now sit within a more constrained geopolitical environment. During a fireside chat, George Yeo, former foreign affairs minister of Singapore and visiting scholar at the Lee Kuan Yew School of Public Policy, focused on structural shifts in global power rather than short-term political events. Referring to recent US actions in Venezuela, he described them as “another cracking of the ice that has been going on for some time,” signalling a gradual move towards a more clearly multipolar world. Yeo argued that the US, constrained by “backbreaking debt,” no longer has the capacity to sustain its earlier global posture and is consolidating influence closer to home. “The world is changing into a new configuration,” he said, warning that the transition could be “very interesting, even dangerous,” particularly in the absence of effective global coordination. Within this context, Yeo described relations between the US and China as managed competition rather than imminent conflict. Economic interdependence, domestic priorities and regional stability impose limits on both sides, even as rivalry continues to shape policy choices. “I do not think there is trouble in East Asia for the immediate term,” he said, while acknowledging ongoing contestation across trade, technology and security. For small states, survival depends on realism rather than alignment Yeo also reflected on the implications of a more fragmented global order for smaller states. He described Singapore’s position plainly: “We are price takers in the world. We accept the world for what it is.” Survival, he argued, depends on remaining “completely objective, completely clinical in our analysis,” and on finding “spaces for us to live by offering services to those who need them, through arbitrage and differentiation.” He cautioned against taking sides when major powers contest influence, stressing that Singapore’s responsibility is not to reshape global outcomes, but “to survive, to be a peacemaker, never a troublemaker.” His remarks underscored the importance of discipline and realism in an environment shaped by forces beyond the control of smaller economies. Portfolio construction within clearer limits Within these constraints, portfolio construction increasingly depends less on timing and more on discipline across cycles. Vasu Menon, managing director of investment strategy at OCBC, noted that global equities have delivered a “third year of bull market gains” and reminded investors that “historically, bull markets have lasted five to six years.” He explained that interest rate cuts outside a recession typically support equities, adding that “we do not see a recession now, and the Federal Reserve cutting rates is positive for markets.” Menon placed greater emphasis on discipline than on timing. “Investments are not a race, they are a journey,” he said, encouraging investors to “stay invested, manage risk, and keep a diversified portfolio”, with a preference for Asia excluding Japan. Within this approach, domestic markets also regain relevance. Carmen Lee, head of OCBC investment research, highlighted Singapore equities as part of portfolio diversification. “For those who have neglected Singapore, please do not neglect Singapore anymore,” she said, noting “about 27 percent total returns” including dividends, outperforming many global peers. She linked renewed momentum to initiatives such as the Grant for Equity Market Singapore and the government’s SGD 5 billion ($3.9 billion) Equity Market Development Programme, which channels institutional capital into Singapore equities, particularly small and mid-cap stocks. Alternative assets and infrastructure reflect structural adaptation As constraints become clearer, alternative assets such as gold and silver play a more deliberate role in strengthening portfolio resilience. Christopher Wong, executive director and foreign exchange strategist for global markets research and strategy at OCBC, said gold has moved “beyond a nice-to-have tactical hedge” to become “a strategic core holding.” He pointed to sustained official sector demand, noting that “central bank buying forms that structural demand” in an environment marked by policy uncertainty and elevated leverage. OCBC notes that more than 90 percent of global central banks expect to increase gold reserves over the next 12 months. Silver, by contrast, acts as “an amplifier,” supported by industrial demand, though investors should “mind the volatility.” Adaptation also extends to financial infrastructure, where digital assets are moving from experimentation towards practical use. Steven Hu, head of digital assets, global markets at OCBC, described tokenisation as “strategically important for banks,” enabling financial products to operate globally “24/7, in real time.” He noted that “2025 marked the shift from testing to commercialisation,” highlighting collaboration with regulators and market participants, including wholesale central bank digital currency pilots with the Monetary Authority of Singapore and participation in initiatives such as Project BLOOM, which explores how tokenised deposits and digital money can function within existing banking and settlement systems. The seminar underscored a market environment where opportunity and constraint move side by side. Liquidity continues to underpin asset prices, but its influence is increasingly mediated by geopolitics, policy boundaries and structural economic shifts. Investment decisions therefore place greater emphasis on diversification, risk control and consistency across market cycles. Confidence has not vanished, but it now rests more on discipline and structure than on the expectation that favourable conditions will continue unchanged.
