Following two previous years of weak performance, the financial services
sector grew by a stronger 4.1% in 2000. The rebound was driven by stronger
growth across the board: in banking, insurance and investment advisory
activities. Growth in the insurance industry was spurred particularly by strong
demand for investment-linked insurance products. (See Table 2.) The only sub-sector that declined was the stock, futures
and commodity brokers sub-sector which was weighed down by weak market sentiments.
In the first quarter of 2001, the financial services sector grew by 3.0%. Total
assets in the Asian Dollar Market (ADM) and the Domestic Banking Units (DBU)
of banks were US$484.7 billion and $363.7 billion respective. New business
in the life insurance industry grew by more than 300% while total gross
premiums from general insurance rose by 25.4%. In the equity and derivatives
markets, first quarter average daily turnover on SGX-ST dropped from 514.5
million units in 2000 to 350.3 million units in 2001, while first quarter average daily
turnover on SGX-DT increased from 110,320 contracts in 2000 to 125,228
contracts in 2001. Foreign exchange trading activity recovered to an average
of US$107.1 billion per day in the first quarter of 2001.
Reflecting an overall trend towards consolidation in the financial sector,
the number of financial institutions, decreased across the board during
the financial year, except for Restricted Banks, stockbroking companies and
investment advisers. (See Table 3.) The number of commercial banks
decreased from 140 to 133 in the previous year as six new banks were
admitted and 13 ceased operations during the year, mainly on account of
international mergers and alliances. Likewise, the total number of insurance
companies reduced from 153 to 151 as at 31 March 2001.
The number of Restricted Banks increased from 16 to 20.The number
of stockbroking companies increased to 35 SGX-ST member companies and
46 non-SGX-ST member companies. There was also an increase in the number
of investment advisers by 14 to 168.