ROBUST, TRUSTED, AND
PURPOSEFUL FINANCIAL CENTRE
- A DYNAMIC AND PURPOSEFUL FINANCIAL CENTRE
- Growing Our Core Industry Pillars
- Box 2: Singapore as a Global Insurance Marketplace
- New Growth Areas
- Enhancing Workforce Competencies
- Box 3: Milestones in Developing the RMB Market in Singapore
A DYNAMIC AND PURPOSEFUL FINANCIAL CENTRE
GROWING OUR CORE INDUSTRY PILLARS
Singapore continues to serve as the regional funding centre for trade flows within Asia as well as between Asia and the rest of the world. As at March 2014, total outstanding trade finance in Singapore grew by 17% to S$574.2 billion. Bank lending remained strong, bolstered by sustained growth in the region. Total assets in the banking sector increased by 7% to S$973.1 billion as at March 2014.
Singapore's insurance market continued to grow strongly, with non-life gross premiums rising 7.0% to reach S$11.2 billion and life insurance total assets increasing by 2.9% to reach S$142.5 billion in 2013. Further growth can be expected in tandem with increasing insurance demand in Asia. The market has built up significant expertise in specialty insurance, namely marine, energy, catastrophe, credit and political risks. Most Asian risks, including entire large reinsurance programmes and specialty risks, can be fully placed in Singapore.
Singapore's asset management industry continued to grow in size and diversity. Assets under management (AUM) grew by 11.8% from S$1.63 trillion in 2012 to S$1.82 trillion in 2013, contributed by growth in various sub-sectors including traditional and alternative managers, insurers and wealth managers. The Asia-Pacific region continues to be a key investment destination for global investors with longer term investment horizons, both within and outside Asia. Allocation to the Asia-Pacific region accounted for 67% of total AUM in 2013.
Foreign Exchange and Listed Derivatives
The Bank for International Settlements (BIS) 2013 Triennial Foreign Exchange (FX) survey ranked Singapore as the third largest FX centre globally after London and New York, and the largest FX centre in Asia. Average daily FX turnover volume in Singapore grew by 44% to US$383 billion in April 2013, compared to US$266 billion in April 2010.
Singapore also continued to grow strongly as a trading hub for listed financial and commodity derivatives. Total futures and options volume on SGX increased 32% year-on-year to hit a new high of 100.6 million contracts in 2013. Products such as the Nikkei 225 futures and options contracts, as well as the China A50 and MSCI Indonesia futures contracts also registered new highs in average daily traded volume. In addition, SGX launched a suite of Asian FX futures in 2013 to promote greater transparency and to serve the investment and risk management needs in the Asian time zone. Six currency pairs were initially launched in November 2013. SGX has since announced plans to expand this current suite to include five currency pairs in 2014. In the commodities space, SGX launched iron ore futures contracts on the back of its successful suite of iron ore swap contracts.
SGX also signed an MOU with the Shanghai Futures Exchange to jointly explore areas of cooperation in the development of derivatives for energy, metals, chemicals and commodity indexes. The MOU would enable customers of SGX to access greater opportunities in Asia and further boost SGX's longterm commitment to China. The year also saw ROBUST, TRUSTED, AND PURPOSEFUL FINANCIAL CENTRE more global exchanges building up their Asian footprints through acquisitions in Singapore, with the Intercontinental Exchange Group acquiring the Singapore Mercantile Exchange and Deutsche Börse acquiring a majority stake in Cleartrade Exchange
Corporate Debt Market
Singapore's corporate debt market, comprising SGD and non-SGD debt, registered an 18% year-on-year growth in 2013 to S$272 billion. SGD-denominated corporate debt outstanding rose by 9% to S$119 billion while non-SGD debt outstanding increased by 26% to S$153 billion. Foreign issuers accounted for 15% of SGD bond issuances.
During the year, several significant developments have contributed to the corporate debt market's growth. The commencement of RMB clearing arrangements by the Industrial and Commercial Bank of China (ICBC) Singapore branch in May 2013 helped spur the issuance of RMB 7.5 billion of Lion City Bonds up to March 2014. These saw strong demand among investors in Singapore and the region.