Remarks by Mr Tharman Shanmugaratnam, Minister for Finance, at the Opening of Standard Chartered Bank's Marina Bay Financial Centre Office on 21 January 2011
Mr Peter Sands, Group Chief Executive
Ladies & gentlemen
1 It is a real pleasure to be here with you for the official opening of StanChart’s Marina Bay Financial Centre (MBFC) office.
2 It is a significant event. StanChart, a bank with a large global footprint, now has at MBFC one of its largest offices worldwide. Its dealing room here at MBFC will also be the largest among all financial institutions in Asia.
3 StanChart’s move to MBFC is timely. Asian finance is now well into a new phase of development.
4 We know the economic story. There are no straight lines in Asian growth, but by every indication is where the largest increment to global demand is going to come from - now and in the next decade. Cross-border activity too is on the upswing in Asia - intra-Asian trade is growing much faster than trade with the rest of the world, and intra-Asian investments are picking up quickly. Both have some way to go. (By the end of the decade, Asia’s trade is expected to form 60% of global trade flows, with intra-Asian trade forming at least half of all Asian trade.)
5 Finance is following economic growth and trade. Asian finance is in many respects catching up with the economic reality of a region that is now at the forefront of world growth. Almost every segment of Asian finance is now growing rapidly - trade and structured trade finance, cross-border corporate lending and infrastructure finance, capital-raising in equity and bond markets (increasingly too being done across borders), corporate treasury services and wealth management for affluent and high net worth groups.
6 With a broad mix of businesses and a combination of both strong local customer bases and a global reach, StanChart is well-placed to take advantage of these trends, and to lead in their development.
7 Singapore too is well-placed to take Asian finance forward and grow its role as a global financial centre. We are building on our position as a sound and competitive financial centre, on three fronts.
8 First, we are leveraging on Singapore’s business role as a “Global-Asia” hub, connecting Asia to the world. We are deepening our expertise as a major trading, logistics, aviation and maritime centre and integrating such operations with related specialty services in the financial sector. This positions Singapore well as a base for both multi-national companies (MNCs) and small and medium enterprises (SMEs) to manage their regional and global operations.
9 Second, we are promoting the hubbing in Singapore of various high value-added financial services such as trade finance, infrastructure finance, wealth management, commodities trading, treasury services and risk management. For example, we have already seen increased treasury services. More than 3,000 Chinese and 4,000 Indian companies have established regional operations in Singapore. Their treasury needs are served well by Singapore’s interest rate swaps and foreign exchange markets, ranked as the 4th most active foreign exchange market worldwide last year, and innovative risk management infrastructure like AsiaClear, Asia’s first and only central counterparty platform for clearing
10 Third, through long-range planning and concerted inter-agency efforts within government, Singapore now offers state-of-the-art and well-integrated physical infrastructure to cater to the needs of global FIs and give them room to expand in Singapore. Marina Bay is emerging as a vibrant and dynamic new business and financial district. When fully developed, the Marina Bay business and financial downtown will be as large as Hong Kong’s Central business district and larger than London’s Canary Wharf.
11 The MBFC is one of the first offices to be built in Marina Bay. Its purpose-built facilities include large, column-free space and features that provide resilience against outages, such as dual-feed power supply from different substations and dual telecommunications cables from different telephone exchanges. Employees of global FIs can also enjoy the whole variety of lifestyle amenities in Marina Bay, including recreation, shopping, dining, cultural events and entertainment.
12 Office rentals have risen significantly, but Singapore remains highly competitive compared to other leading financial centres. (In the 4th quarter of 2010, Grade A office rentals in Singapore were about $9.90 psf/mth. Premium office rentals in Hong Kong and Tokyo were respectively about 2.7 and 2.4 times that of Singapore.) Taking into account quality, costs and connectivity - and the needs of front, middle and back offices in finance - Singapore now provides the most competitive space in Asia, and in many respects globally.
13 There is also ample supply of office space coming onto the market over the medium term. According to an estimate by CB Richard Ellis1, an estimated 8.2m sq ft of office space is expected to be added by 2015. About two-thirds of this is “grade A” or premium quality office space. What this amounts to is an increase of almost two-thirds in premium office space in Singapore over the next five years. The Government will continue to ensure a steady supply of office space to meet the expansion of financial institutions and businesses, to ensure we remain a competitive and compelling centre for global activity.
14 I congratulate you on the opening of its MBFC office. The stars are aligned for StanChart as it embarks on its next phase of growth. Singapore will be a partner in your growth.
1 CBRE Singapore MarketView Q42010