Monetary Authority of Singapore Annual Report 2011/2012
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Resilience amidst Challenging Market Conditions

Singapore’s financial services sector registered 9.1% growth in 2011. Despite challenging market conditions experienced in the second half of the year, domestic and offshore lending activities remained resilient even as sentiment-sensitive segments such as fund management and stock broking were impacted.

Bolstered by growth in the Asian region, the Singapore corporate debt market grew by 9% year-on-year to S$203 billion as at end of 2011. SGD debt issuances dipped marginally by 4% year-on-year to S$24.8 billion while non-SGD debt issuances more than doubled to S$71.1 billion in the same period. Reflecting the growing attractiveness of the SGD as a funding currency, foreign entities accounted for 25% of all SGD debt issuances in 2011, up 6 percentage points compared to 2010.

The foreign exchange (FX) market in Singapore also registered healthy growth in 2011. Based on the latest half-yearly survey by the Singapore Foreign Exchange Market Committee (SFEMC), total average daily FX turnover in October 2011 was US$352 billion, an increase of 9% from a year ago.

Based on the 2011 Singapore Asset Management Industry Survey, assets managed by fund managers in Singapore stood at S$1.34 trillion. Although asset under management (AUM) declined by 1.2% year-on-year as a result of the difficult market environment, the sector remained resilient. More than 70% of the AUM was sourced from outside Singapore and more than 60% of the total assets were invested in the Asia-Pacific region, reflecting Singapore’s role as an asset management hub serving regional and international investors.

The insurance industry posted good growth in 2011 as total industry assets increased 7.9% to S$161.1 billion. With growing industrialisation, urbanisation and infrastructure investments in Asia, coupled with a more affluent middle class and increasing risk sophistication in the region, there was an increase in demand for insurance solutions. Life insurance industry assets grew by 1.5% to S$133.9 billion, and non-life insurance gross premiums increased 15% to S$9.8 billion.