Monetary Authority of Singapore Annual Report 2011/2012
Our Work

CAPITAL MARKETS DEVELOPMENT

Broadening and Deepening Singapore’s Debt Capital Market

The Singapore dollar (SGD) debt capital markets have grown in breadth and depth over the last decade. Nonetheless, MAS has embarked on three initiatives to further improve their efficiency and liquidity over the course of the year. The first initiative involves the provision of swap liquidity to primary dealer banks handling SGD debt issuances for foreign corporates. When completed, the MAS facility will support swap transactions at market-determined prices to minimise uncertainties in the bond pricing process.

Complementing this will be the establishment of a SGD corporate debt securities lending platform, in partnership with the industry, from which key players will be able to borrow securities. This platform provides greater assurance that market makers will be able to deliver securities, and reduces their risk of being squeezed in the event they are unable to shortcover the bonds they have sold.

MAS has initiated an industry working group, to introduce a price discovery platform where market participants will contribute end-of-day prices for SGD corporate bonds. This should be completed by the second half of 2012, and is expected to significantly enhance transparency in the corporate bond market and provide reliable mark-to-market prices for the industry.