MAS: Annual report 2006 / 2007
CONTENTS
HOME
 
ENTERPRISE: Our Role
BUILDING ON A ROBUST MACROECONOMIC ENVIRONMENT
DEVELOPMENTS IN THE SINGAPORE SECURITIES MARKET
FOSTERING A SOUND & REPUTABLE FINANCIAL CENTRE
RISK MANAGEMENT & INFRASTRUCTURE
GROWING SINGAPORE AS AN INTERNATIONALLY COMPETITIVE FINANCIAL CENTRE
CURRENCY
ORGANISATIONAL INITIATIVES
GROWING SINGAPORE AS AN INTERNATIONALLY
COMPETITIVE FINANCIAL CENTRE
34
Asset Management 34
Box 7 - Emerging Clusters In Singapore’s Financial Services 35
Active Trading in the Equities and Derivatives Market 37
Leading Real Estate Investment Trusts Market in Asia 38
Shipping Trusts Seek Singapore Listing 38
Infrastructure Finance Taps the Capital Markets 38
Box 8 - Regulatory Oversight Of Commodity Futures 38
Growth in Collateralised Debt Obligations Market 39
Growth in Over-the-Counter Commodity Derivatives  
  Central Counterparty Clearing Activity 39
Box 9 - Listing Of Pioneer Exchange Traded Funds 39
 
Box 7
EMERGING CLUSTERS IN SINGAPORE’S FINANCIAL SERVICES
There has been a significant diversification of growth supports within the financial services sector in recent years. While banking and insurance-related services still constitute the largest component of financial sector GDP, several emerging financial clusters have contributed increasingly to growth. Such sentiment-sensitive industries – which are strongly tied to conditions in international financial markets – include the wealth advisory and brokerage & treasury clusters. Figure 1 depicts the key clusters within the financial services industry. The sentiment-sensitive industries constitute an emerging “periphery”, around a “core” that consists of the larger incumbent financial intermediation and insurance segments.

Within the periphery, wealth advisory and brokerage & treasury services have seen higher growth rates in recent years, compared with the core clusters. Indeed, the former grew at an average annual rate of 9.5% over the 2001-06 period, more than double that of the core clusters (Chart 13). Consequently, the share of the emerging clusters has increased (Chart 14).

 
* Compr ises mainly credit agencies, investment holding companies, public financial institutions such as MAS and
CPF Board, as well as banks’ fee & commission incomes.



In 2006, the emerging clusters accounted for nearly half of the 9.2% expansion in the financial sector (Chart 15).

Several key drivers have underscored the growth of the emerging clusters in recent years. First, the strengthening interest on the part of global investors for Asian equities has been advantageous for Singapore, given the Republic's role as a hub for Asian-oriented mandates. Second, the rapidly growing pool of high net worth individuals in the region has spurred demand for private wealth advisory services. Third, the increasing sophistication of domestic and regional investors has facilitated the growth of niche financial services such as private equity, philanthropy and trust foundations. These growth drivers are expected to continue to underpin domestic financial services growth in the medium term.