by Alvin Foo, Markets Correspondent

THE equities industry has gained tremendously because of the global financial crisis, said the head of a key stockbroking company in Singapore.

Investors - faced with near-zero bank deposit interest rates and fewer alternative options for their funds - have turned to stocks in a big way.

This trend is set to continue, even as Western funds are expressing more interest in Asian stocks.

DBS Vickers chairman and chief executive Edmund Lee told The Straits Times: 'Our industry has benefited in a very big way, because there are only two asset classes that have performed in the last 12 months - equities and property.'

His company was named the best retail broker at the Securities Investors Association of Singapore (Sias) awards earlier this month.

In Singapore, the surge in the Straits Times Index (STI) bears witness to the renewed interest and liquidity in stocks. Last week, the index hit a 13-month high, crossing the 2,700-point mark. It has recouped all of the losses incurred since the sharp selldown following the collapse of Lehman Brothers.

Mr Lee added: 'Now people are more aware of equities, and we've explained to them that many stocks out there are very safe and stable and produce a yield.'

What has also boosted the market, he noted, is that banks have stopped selling other products and have been wary of developing new products since the crisis.

Thus, money that used to flow into these other channels is now being put into equities and property.

Moreover, these channels have become far more complicated for investors to traverse.

Mr Lee said: 'If you walk into a bank in Hong Kong today to buy a mutual fund, they'll take you into a room, film you and ask you 20 questions. At the end of 20 questions and one hour later, then they'll say you can buy it.'

Low bank deposit rates make stocks doubly attractive, as they could appreciate in value as well as offer dividends.

Mr Lee noted that Asian markets have become a more significant port of call for Western investors, with global funds increasing their asset allocation into the region.

'What used to be 2 to 3 per cent of their portfolios has now gone up to 6 per cent,' he said. 'This quantum of money is very large, and Asian markets don't have very much depth. So when you pour a lot of liquidity into the market, the only way for it to react is to go up.'

Recent roadshows to the West revealed that fund managers in the United States were taking a bullish stance on Asia. In Europe, some were asking for an overview of Asian markets for the first time.

Apart from its Sias award, DBS Vickers won seven prizes at this year's StarMine analyst awards, which honour analysts for the excellence of their stock recommendations and the accuracy of their earnings forecasts.

Research is an area that has earned DBS Vickers much praise.

Mr Lee said: 'That product you see on the market is something we use institutional discipline to produce. We have a very strong process in supervision for content and compliance.'

Being able to provide both the macro and micro view means a research house can give its clients a clearer picture.

Mr Lee noted that DBS Vickers was the first house to make the call early in the year that the market was heading up.

Though many argue that the global economy will undergo a W-shaped recovery and perhaps a double dip, Mr Lee believes the V-shaped rally is likely to continue for stock markets. He said: 'I can see the markets recovering from here.'

alfoo@sph.com.sg

This article was first published in The Straits Times.