S’pore well positioned to gain from regional market integration: MAS
SINGAPORE — The Republic is poised to tap a myriad of opportunities arising from greater integration among capital markets in Asia, where strong economic growth and an expanding middle class are driving demand for financial services, said the Monetary Authority of Singapore’s (MAS) deputy managing director Jacqueline Loh yesterday.
Singapore’s edge lies in an established market structure and talent pool that can help facilitate market-integration initiatives that industry players undertake, Ms Loh added in her keynote speech at an annual conference by the Asia Securities Industryand Financial Markets Association (ASIFMA).
“Singapore is well positioned to offer integrated capital market solutions, given that many parts of the value chain — trading, clearing, settlement and reporting — are already being offered in Singapore across a spectrum of asset classes, including equities, bonds, foreign exchange and derivatives,” she said.
“With technology transforming activity across financial markets, the profile of jobs in finance will change in the years to come. Through the Institute of Banking and Finance, the MAS is working with the industry on an enhanced set of desired competency standards to grow the pipeline of skilled talent ready to serve the growth in capital markets in Asia.”
Demand for financial services is expected to increase in the region alongside the growth in income, as economies here expand.
The Asian Development Bank has projected that the sum of gross domestic product of China, India and the Association of Southeast Asian Nations (ASEAN) in purchasing power parity terms could quadruple by 2030 to exceed that of the United States and Europe combined.
An integrated capital market will offer more choices for investors and more sources of financing for companies. It will also allow for better mobilisation of funds from surplus countries to those that need capital and improve the efficiency of investment allocation needed for economies to grow further.
“An integrated capital market (will lead to) generally deeper and more liquid markets, thus improving pricing through competitive spreads. Over time, greater scale and integration within and across asset classes can create greater opportunities in Asia,” Ms Loh said.
Several integration initiatives have emerged in the region over the years, such as the ASEAN collective investment scheme framework that allows investors in Singapore, Thailand and Malaysia access to products such as unit trust funds outside their home markets.
A recent closely watched development is the bourse link between Hong Kong and Shanghai that would allow mainland investors to buy Hong Kong shares and give foreigners unprecedented access to China’s US$4.2 trillion (S$5.44 trillion) stock market.
The eagerly anticipated landmark scheme has been delayed, with no indication of when it might start.
Mr Ashley Alder, chief executive of Hong Kong regulator Securities and Futures Commission, said: “As far as our organisation (is concerned), our job is done — we’ve approved all the rules necessary for the programme to move ahead. I hope it launches sooner rather than later.”
By LEE YEN NEE
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