"The Changing World" - Keynote Speech by Ms Jacqueline Loh, Deputy Managing Director, Monetary Authority of Singapore, at The World Federation of Exchanges General Assembly and Annual Meeting on 9 October 2019
- In the next few years, growth in ASEAN will continue to be driven by intra and extra-regional trade as well as strong investment flows, even as domestic demand will play a more important role.
- ASEAN also has demographics on its side: we are for the most part a young region, with a rapidly growing middle class who is increasingly consuming higher value-added goods and services.
- Asian wealth accumulation is also growing quickly. Assets under management in the Asia Pacific is expected to increase faster than any other region globally, almost doubling from 2017 to about US$30 trillion in 2025. This will result in increased demand for investment opportunities across a wide range of products like equities, fixed-income, and risk management tools.
- To foster sustainable growth in ASEAN, the ASEAN Capital Markets Forum (ACMF) has developed the ASEAN Green Bonds Standards, in collaboration with the International Capital Market Association (ICMA). The standards, based on ICMA’s globally recognised Green Bond Principles, seek to facilitate ASEAN capital markets in tapping green finance to support sustainable regional growth and meet investor demand for green investments. As of October 2019, 80 such bonds from Singapore, Malaysia, Thailand, and the Philippines have been issued for renewable energy, green buildings and low carbon transportation
ASEAN Green / Social / Sustainability Bonds / Sukuk for October 2019.
- Sustainable reporting has become more important with growing concerns from consumers and investors that financial returns are achieved with integrity, backed by ESG considerations.
- In recognition of such trends, the Singapore Exchange (“SGX”) has introduced a “comply or explain” regime for sustainability reporting in 2017, where listed companies are required to disclose and explain their sustainability practices.
- ASEAN governments have also imposed regulatory drivers, to assist companies with identifying gaps and areas for improvements in their sustainability efforts
GCIO Sustainability Reporting in ASEAN Research Report 2018. For example, in the mining and minerals sectors, companies are subject to commonly-agreed-upon regional guidelines for assessing and reporting on the affected environment.
- First, the integration of sustainability with commodity derivatives. The WFE has published a white paper that explores how commodity derivatives exchanges could create new mitigation or investment tools that respond to environmental challenges, and incorporate sustainability elements into existing contracts;
- Second, the adoption of sustainable practices and principles. The WFE has partnered the United Nations Sustainable Stock Exchanges to set out a blueprint to support exchanges in embedding sustainability in their operations.
- Many of you have made significant headway in deploying technology in multiple ways. A 2018 report commissioned by Nasdaq
Nasdaq and Celent July 2018, Global C-Suite Study on Capital Markets Infrastructure Technologyfound that 70% of stock exchange operators surveyed were working on pilot projects to deploy DLT. This includes exchanges from the US, Europe, Australia, and Singapore.
- In Singapore, SGX and MAS successfully developed Delivery vs Payment (DvP) capabilities for the settlement of tokenised assets across different blockchain platforms last year. This can simplify post-trade processes and shorten the settlement cycle. Australia’s stock exchange, the ASX, is also using blockchain to replace its post-trade clearing and settlement platform.
- Venture capital and private equity managers are an essential element in the financing lifecycle, by providing smart capital and operational and business expertise to portfolio companies.
- To facilitate activities of venture capitalists to support small and medium-sized enterprises (SMEs), we have simplified and shortened the authorisation process for venture capital managers.
- We have also set up a deal making platform called MATCH, or Meet ASEAN’s Talents and Champions)
This year, MATCH has been enhanced with a new “Deal Fridays” format, reflecting a joint partnership with Enterprise Singapore to connect a carefully curated list of growth-stage ASEAN companies with investors through weekly investor-company match-making events. Since the launch of “Deal Fridays” in June 2019, over 400 companies and 400 investors have participated in Deal Fridays., to connect global capital and the ASEAN enterprise community in 2018. This will help to grow the pipeline of companies that will eventually require listing in our public markets.
- Singapore also organises the annual Singapore FinTech Festival (SFF) and this will be combined with the Singapore Week of Innovation and Technology (SWITCH) that is coming up on the 11-15th November, to provide a platform for industry players to gain greater understanding of fintech applications and developments as well as support innovative solutions to find commercialisation opportunities.
- SGX is also working with licensed private market platforms to facilitate the listing process for portfolio companies. Such platforms provide PE/VC managers with opportunities to invest or exit, and provide a pipeline of companies that could list on SGX. Such private-public markets partnerships can serve as an engine of growth for our public markets and provide support for enterprises throughout their corporate lifecycle.
- For example, SGX has joined global exchanges in Canada, Europe, and the US, in introducing the Dual Class Share (DCS) structure to support firms which have shares with different voting rights to raise funds. DCS listings will broaden the range of investment options for investors and add vibrancy to Singapore’s capital markets and capital markets globally.
- MAS has committed S$75 million over three years to help companies list and raise equity capital on SGX and support initiatives that broaden and deepen our research ecosystem. This will help to mitigate the growing and global phenomena of shrinking research coverage and build up our capabilities in covering public markets.
MAS announced the launch of the Transition Credits Coalition (TRACTION) and two pilot projects to test the use of high-integrity transition credits in transactions for the early retirement of coal-fired power plants.
MAS launched the Singapore-Asia Taxonomy for Sustainable Finance (Singapore-Asia Taxonomy) – which sets out detailed thresholds and criteria for defining green and transition activities that contribute to climate change mitigation across eight focus sectors.
The eighth edition of the Singapore FinTech Festival came to a close on 17 November 2023, drawing a record 66,000 participants, up from 62,000 attendees in 2022.