Reforms lure global players

The government's financial reforms and liberalisation drive have begun to pay off, attracting about 130 new private sector projects in the past year.

Several asset-management companies and insurance firms have committed to setting up operational headquarters in the republic.

In addition, 10 more multi-national corporations have located their regional treasury centres. These include as Caltex, Ericsson, Intel and NCR.

'Total assets under management in Singapore are now higher than before the crisis, and fund managers have increased their fixed-income capabilities in Singapore during this past year,' said Koh Yong Guan, managing director of the Monetary Authority of Singapore (MAS).

Discretionary funds under management were about S$140 billion (HK$640.44 billion) as of June 30, up 13 per cent on end-1997.

The reform drive, begun by Deputy Prime Minister Lee Hsien Loong 18 months ago, has resulted in a host of measures to strengthen competitiveness and foster recovery, including a $10.5 billion cost-cutting package launched last November.

'I am confident that we will realise our vision of making Singapore a world-class financial centre,' said Mr Lee, who is also MAS chairman.

Tax incentives have been rife, full foreign competition gradually introduced, and many bureaucratic hurdles pulled down.

The MAS' strategy has been three-pronged: to promote a vibrant asset-management industry; develop deep and broad capital markets in debt, equity and derivatives; and to build a strong and competitive banking industry. The insurance industry is next in line.

'We will be opening up the insurance industry gradually, reducing regulations and consolidating local players,' MAS deputy managing director Tharman Shanmugaratnam said.

The MAS has said it needs to continue broadening and deepening Singapore's capital market in debt, equities and derivatives, and build its asset management activity.

Singapore's foreign exchange market is twice the size of Hong Kong's, but it still lags its rival in most areas.

'We will continue to push the development of Singapore government securities and Singapore dollar bond markets, and attract debt origination and trading teams to base their operations in Singapore,' Mr Koh said.

SINGAPORE