Distinguished guests, ladies and gentlemen,

Good morning.It is my pleasure to be here on the occasion of the launch of the Singapore Mercantile Exchange’s electronic trading platform.

2   I congratulate the Board and Management of SMX on the launch of the first pan-Asian multi-product commodity and currency derivatives exchange.  Since its founding, Singapore has been a major port city that lies at the centre of a region that is rich in natural resources. Commodities trading have early beginnings in Asia since the 14^th century with the spice trade drawing Indian and Arab traders and merchants and later, the Europeans into the region. Just as in history, commodity markets developments will be closely intertwined with economic developments.

3   As many of you know, Asia had, for the first time, led a global recovery. Asian economies exited the ‘Great Recession’ of 2008/2009 as early as Q2 2009, when the G3 economies were undergoing the sharpest sequential pace of contraction. Six quarters from the trough, the region’s combined GDP has risen by nearly 15%. Many Asian economies have reported stronger-than-expected growth in the first half of 2010, averaging some 10.4%. This recovery was led by domestic demand, underpinned by sound balance sheet positions of households and corporate. The governments’ stimulus measures, which amounted to an estimated US$784 billion (9% of aggregate GDP) during the crisis, had also contributed to the resilience of domestic demand in the region.

4   More recent economic data have raised some concerns about the sustainability of the current global recovery in the developed economies. To quote Fed Chairman Bernanke, economic outlook “remains unusually uncertain”. In particular, the short-term economic prospects look decidedly uneven across the major regions. In the US, persistent weakness in the labour and housing markets, and the need for households to rebuild savings, will dampen consumer spending. Europe, which has been later in the recovery cycle, appears to be still benefitting from the uplift in inventory adjustments and some support from exports. However, fiscal consolidation and sovereign debt issues remain a risk to the economic outlook.< Yesterday, Japan announced a new fiscal stimulus package of Yen 920 billion to support the fragile recovery.

5   Notwithstanding these uncertainties, there are a number of factors that will continue to support Asia’s growth over the medium to long term. One of these is the need for the region to build and modernize its infrastructure, both to enhance its productive capacity and to lift the living standards of its people. The Asian Development Bank (ADB) has estimated that around US$750 billion of investment will be required annually over the next 10 years in various infrastructure projects, such as power, water, telecoms, transport, among other things. In addition, urbanization, especially in China and India, will continue to lead to demand for housing, healthcare, education and other facilities. Thus, even as some of the industrialized economies continue to grapple with the after-effects of the worst recession in post-war history, Asia’s steady growth and the need for infrastructure modernization will help to underpin the demand for global commodities and other intermediate inputs.

6   In this regard, Singapore will continue to be an important financial and risk management hub to serve the region. Our financial centre has developed on a sound and progressive regulatory framework, world class infrastructure, conducive business and trusted legal environment and a talented workforce. According to the BIS, Singapore is the largest foreign exchange trading centre in Asia after Tokyo; and the world’s fifth largest OTC derivatives trading hub. Many global financial institutions have chosen to establish a significant presence here to provide investment banking, corporate banking and private banking services to regional corporates and other clients with financial and risk solutions. Currently, Singapore is home to more than 280 global trading companies under the International Enterprise Singapore’s Global Traders Programme that include some of the world’s top integrated energy groups and agri-commodity groups.

7   In the commodities space, Singapore is a leading Asian hub in both physical goods and futures. Singapore is Asia’s price discovery and trading centre for refined oil products and rubber, and a key OTC commodity derivates trading hub, accounting for more than 50% of Asian volumes. For these reasons, many international trading players in both physical and derivative trading activities are located in Singapore to support Asia’s needs for resource commodities.

8   SMX’s launch is a significant milestone in the Singapore commodities derivatives market. Its development will add to the vibrancy of Singapore’s financial centre and cater to the growing needs of market participants in commodities and derivatives trading.

9   May I once again congratulate SMX on its launch, and wish it every success!