Market activity in early 2003 was
characterised by sluggish trading volumes and languishing stock
prices, as investor confidence was weighed down by concerns
over the Iraq war in early 2003 and by the subsequent outbreak
of SARS in April. The local market subsequently emerged from
the doldrums with the containment of SARS and the end to the
war. The Singapore economy’s robust recovery from SARS
and the broad improvement in the global economic climate prompted
investors to shift their portfolios into equities and other
cyclically sensitive assets. As at end 2003, the STI
rose to 1,764.5 points, an increase of 31.6% from the start
of the year.
Turnover value on the Singapore Exchange (SGX) rose to S$162
billion in 2003, an increase of 36.4%. In volume terms, turnover
grew 94.6% to 218 billion shares, with a significant portion
of the increase concentrated in the second half of 2003. The
joint market capitalisation of the Mainboard and SESDAQ rose
34% to S$390 billion in 2003, boosted by the rise in equity
prices and in the number of listed companies. As at end 2003,
a total of 413 companies were listed on the Mainboard and 138
companies were listed on SESDAQ, up from 385 and 116 in 2002.
In 2003, the number of derivative contracts traded on Singapore
Exchange Derivatives Trading (SGX-DT) increased 7.1% to a record
35 million, surpassing the previous record of 33 million set
in 2002. This growth was mainly attributable to trading in the
Nikkei 225 stock index futures contract, which grew 46% to reach
7.1 million contracts in 2003.
There continued to be strong interest in the Eurodollar interest
rate futures contract with trading accounting for 53% of total
volumes on SGX-DT. Other high volume contracts include the MSCI
Taiwan index futures, Euroyen interest rate futures, and the
five-year Singapore government bond futures contract, which
all saw growth in 2003.
Enhancing Risk-focused Supervisory Approach
Box 1 – Fostering a Sound and Progressive
Financial Services Sector
