SINGAPORE AS AN INTERNATIONAL FINANCIAL CENTRE
Financial Sector Growth
Singapore's financial services sector posted robust growth of 12.2% in 2010. With Asia leading the global economic recovery, the surge in trade and capital flows, strong growth of Asian corporate activity and increasing wealth accumulation in Asia will drive demand for financial services.
The Singapore corporate debt market continued to register strong growth. Outstanding Singapore dollar debt securities grew 14% to S$84.8 billion in 2010, on the back of a 69% growth in Singapore-dollar corporate issuances to S$25.9 billion compared to the same period in 2009. Non-Singapore dollar corporate issuances grew 24% to S$33.7 billion from 2009. Foreign entities accounted for 19% of all Singapore-dollar corporate issuances in 2010.
According to the latest survey by the Bank for International Settlements, average daily foreign exchange (FX) turnover volume in Singapore registered a 10% growth from US$242 billion in April 2007 to US$266 billion during April 2010, making Singapore the largest FX centre in Asia-Pacific ex-Japan and the fourth largest FX centre globally, up from fifth in 2007.
The strong economic recovery of the Asian region also helped Singapore's fund management industry to recover quickly from the crisis. Based on the 2010 Singapore Asset Management Industry survey, assets under management (AUM) by fund managers in Singapore reached a new high of S$1.4 trillion, representing a 12% year-on-year growth. 80% of AUM was from international sources, with more than 60% of the total assets invested in the Asia-Pacific region.
The Real Estate Investment Trust (REIT) and Business Trust sectors also saw strong growth in 2010, providing investors'-access to tap into the region's infrastructure-financing sector and real estate markets. Since the first REIT listing in 2002, the Singapore REIT market has grown exponentially to become the largest REIT market in Asia ex-Japan. As at March 2011, there were 22 REITs listed on the Singapore Exchange (SGX), with a combined market capitalisation of S$36 billion. 2010 also saw the listing of several large REITs, including Mapletree Industrial Trust and the Sabana Shari'ah Compliant Industrial REIT, the world's largest Shariah-compliant REIT by asset size and the first Islamic REIT to be listed on the SGX. As at March 2011, there were also nine business trusts listed on SGX. This includes Hutchison Port Holdings Trust, which raised US$5.5 billion and is the largest IPO in Singapore and South East Asia to date.
Several milestones were also achieved in Islamic finance in 2010. In June, the Securus Data Property Fund, the world's first Shariah-compliant data centre fund, jointly managed by Keppel DCIM and AEPim, announced its initial closing with US$100 million invested by institutional investors. In August, Khazanah Nasional Berhad, the investment holding arm of the Government of Malaysia, placed out its single largest Sukuk issuance of S$1.5 billion, the largest Singapore Dollar issuance by a foreign issuer so far in Singapore. These deals have added to the broadening range of Shariah-compliant investments and are evidence of the depth and diversity of Singapore's asset management and capital markets.
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