ROBUST, TRUSTED, DYNAMIC AND

PURPOSEFUL FINANCIAL CENTRE

A DYNAMIC AND PURPOSEFUL FINANCIAL CENTRE
STRENGTHENING CAPITAL MARKETS AND INCREASING PRODUCT DIVERSITY

Capital Markets
In 2015, SGD outstanding debt volumes remained resilient with a growth rate of 8.5% while non-SGD outstanding debt volumes saw a modest fall of 2.4%. The bond market continued to grow in diversity. DBS issued the first covered bond in Singapore in USD, while UOB became the first bank in Asia to issue a EUR covered bond in March 2016. UOB was also the first global issuer to publish its Harmonised Transparency Template under the Global Covered Bond Label Initiative5.

Real Estate Investment Trust Market
In July 2015, MAS refined its proposals to strengthen Singapore's real estate investment trust (REIT) market, in response to industry feedback. The enhancements aim to accord REIT unitholders better protection and greater accountability, while providing REIT Managers increased operational flexibility. The enhancements will be phased in to facilitate smooth implementation by the industry. As of December 2015, there were a total of 39 REITs and property trusts listed on SGX, with a market capitalisation of more than S$65 billion.

Foreign Exchange, Commodities and Derivatives
Singapore continued to grow as a trading hub for FX, commodities and derivatives.

Average daily OTC turnover of FX reached US$401 billion in October 20156. This was a 5% increase from US$381 billion in April 2015, led by growth in FX and cross currency swaps. In response to greater demands for risk management and market transparency, total volume of listed FX, commodity and equity derivatives in Singapore increased by 53% y-o-y to reach 180 million contracts in 2015.

  • Growth in listed FX derivatives was driven by the Indian Rupee (INR) futures contract, which grew six times in 2015 to over four million contracts being traded.
  • In commodity derivatives, the volume of cleared iron ore derivatives doubled to six million contracts, while the volume of benchmark rubber futures traded grew 34% to 650,000 contracts over the year. SGX launched Liquefied Natural Gas (LNG) derivatives in January 2016 to facilitate risk management of physical LNG trading.

In November 2015, ICE Futures Singapore and ICE Clear Singapore commenced operations, broadening the suite of listed derivatives products in Singapore and strengthening Singapore's value proposition as a risk management hub.

Bond Trading Platform
MAS recognised SGX Bond Trading Pte Ltd (SGX-BT) as a Recognised Market Operator in November 2015. The electronic bond trading platform facilitates price discovery and trade matching for dealers and clients. SGX-BT aims to improve liquidity in the trading of Asian bonds by aggregating liquidity providers on its platform.

5 The Covered Bond Label is a market benchmark enhancing transparency of covered bonds by establishing core standards for covered bonds (https://coveredbondlabel.com/).
6 Singapore Foreign Exchange Market Committee Survey on over-the-counter market activity.