MAS To Place Out S$10 Billion to Private Sector Fund Managers as Part of Drive to Develop Singapore's Financial Sector
13 Nov 1998... Minister for National Development and Second Minister for Finance, Mr Lim Hng Kiang, today announced that the Monetary Authority of Singapore (MAS) will be placing out S$10 billion of funds for management by private sector fund managers over the next 3 years.
Speaking at the 25th Anniversary Dinner of the ACI Singapore - The Financial Markets Association (SFMA), Mr Lim said that despite the economic crisis, Singapore has a bold but realisable vision of becoming a premier asset management centre in Asia. For a start, MAS will be placing out S$10 billion over the next 3 years to qualifying fund managers of good, proven track record and who show commitment to developing the Singapore asset management industry. This would include bringing in additional funds for management in Singapore, as well as building up locally-based fund management expertise. Said Mr Lim, "Together with the GIC funds, this S$10 billion contribution from MAS will help to ensure a steady flow of funds to be managed by the private sector. These funds will act as seed money to encourage existing fund management companies to continue to grow in their operations as well as to attract other fund management companies to set up offices in Singapore."
This latest announcement is in line with the recent policy changes to build Singapore into a world-class financial centre. In February, Deputy Prime Minister Lee Hsien Loong, Chairman of MAS, had said that GIC would be placing an additional S$25 billion with external fund managers over the next 3 years. In reference to this, Mr Lim noted that GIC has already granted mandates worth S$6.5 billion in the 9-month period from January to September 1998.
Sharing his optimism for more good performance in the treasury industry, Mr Lim disclosed the findings of the latest MAS Survey of Treasury Activities. Total treasury revenue for 1997 had increased 70% over the previous year to a record S$4.6 billion, while treasury profits have doubled to S$3.1 billion. "1998 promises to be an equally good year for the industry. Increased market volatility in the recent months may be a cause of some concern. But revenue for the first half of this year was already more than half of last year's. These are highly commendable achievements which should provide a strong boost to Singapore's drive to be a premier global financial centre."
TABLE : HIGHLIGHTS OF MAS SURVEY OF TREASURY ACTIVITIES
1998 (1ST half)
Commenting on SIMEX's soon-to-be-launched Hong Kong index futures contract, Mr Lim expressed surprise over concerns in Hong Kong about Singapore's lax regulatory standards. "SIMEX's achievements as an international derivatives exchange have been underpinned by its framework of sound regulations, vigorously enforced. Its system of prudential regulation and financial safeguards is well recognised in the futures industry as being of the highest international standards, and certainly among the most stringent in Asia."
Mr Lim further reinforced that friendly competition between the exchanges of Hong Kong and Singapore can only benefit both. Said Mr Lim, "The Hong Kong Futures Exchange (HKFE) and SIMEX, both internationally-minded exchanges, have acknowledged this. There is no reason for such friendly rivalry to affect the traditional warm ties between the two economies."
SIMEX will launch the MSCI Hong Kong index futures on 23 November, 1998.