Published Date: 31 August 2005

Listing Ceremony of ABF Singapore Bond Index Fund, Opening Address by Mr Heng Swee Keat, Managing Director, Monetary Authority of Singapore


Good morning ladies and gentlemen.  It is my great pleasure to be here today, at the listing of the ABF Singapore Bond Index Fund.

2   The Asian Financial Crisis in the late 1990s prompted governments in the region to explore ways to enhance regional financial cooperation. There is a general view that the high savings in the region can be better intermediated to meet funding needs, if we can develop deeper and broader financial markets. In June 2003, the first Asian Bond Fund (ABF) was launched, as part of a regional cooperation initiative by Central Banks which are members the Executives' Meeting of East Asia and Pacific (EMEAP). It was an important step in central banking cooperation in the region, as it was the first pooling of reserves in Asia, to invest in Asia. 

Asia Bond Fund 2

3    Encouraged by the success of ABF 1, the EMEAP central banks have now launched a US$2 billion Asia Bond Fund 2 (ABF 2).  This is yet another significant step, as unlike ABF 1, ABF2 will invest in local currency denominated bonds, issued by sovereign and quasi-sovereign entities. The ABF2 is intended to promote the development of a deep and liquid regional bond market.

4    The ABF2 comprises a Pan-Asian Bond Index Fund and eight single country Funds. The Pan-Asian Bond Index Fund, which is domiciled in Singapore, was listed on the Hong Kong Stock Exchange last month.  To date, two other single country funds - the ABF Hong Kong Bond Index Fund and the ABF Malaysia Bond Index Fund - have been launched. The remaining five single country funds will be launched in due course.

The Singapore Bond Index Fund and the Market

5    Today's successful listing of the Singapore Bond Index Fund represents a modest contribution by Singapore to this broader regional cooperation effort to develop bond markets in Asia. It is also the fruit of strong collaboration among the regulators in the region to bring this about.

6   The Singapore Bond Index Fund scores a first in another aspect  -it is an exchange traded bond fund, the first of its kind to be listed on The Singapore Exchange.  Adding to the array of financial instruments available here in Singapore, the Fund will provide Singapore investors easy access to a portfolio of local currency denominated bonds at a relatively low cost. This facilitates retail participation, and brings about further diversification of the investor base of the domestic bond market.

7   The listing of the Singapore Bond Index Fund will help generate greater interest amongst international and domestic investors in Singapore's bond market. We believe that it will also spur the development of other Singapore dollar bond products, and raise the profile of ABF2 and other Asian dollar-denominated debt.

8   The Singapore Bond Index Fund is launched at a time when the Singapore bond market is developing in size and sophistication.  An MAS survey of the corporate debt market in 2004 showed total outstanding corporate debt securities increasing 20% to S$123 billion at end 2004, as a wide range of borrowers tapped the Singapore market.  The volume of new corporate debt issuance also grew 17% to S$78.7 billion (of which S$21.7 billion were denominated in SGD). 


9   We are confident that the ABF2 initiative will bring about significant benefits to the development of bond markets in Singapore and in the region, and catalyze improvements in market infrastructure and regulatory cooperation. These are necessary steps for further financial development in Asia.

10  The launch of the Singapore Bond Index Fund was made possible only with the strong support and cooperation of various parties. I would like to thank the Singapore Exchange, the fund manager, DBS Asset Management, the market makers and the participating dealers, for their contributions and commitment in working with EMEAP to make the listing of the Singapore Bond Index Fund a reality. I wish the Fund every success. Thank you.