Singapore lures big investors with bond deals, robust infrastructure finance demand

The city-state also offer forex risk management solutions.

As institutional investors increasingly pivot to Asia in their endless quest for higher returns, Singapore is boosting its reputation as the region's premiere financial centre by rolling out a wider diversity of investible products and risk management solutions.

In a speech at the DBS Institutional Investor Symposium on July 24, Monetary Authority of Singapore's deputy managing director Jacqueline Loh noted that Singapore offers big investors a well-developed debt capital market, enhanced access to Asia's infrastructure finance needs, and a robust suite of foreign exchange risk management solutions.

Loh highlighted that Singapore's debt capital market features a wide range of issuers in both Singapore Dollars and foreign currencies. The number of Asian issuers are also on the rise as more Chinese and Indian corporates tap the fixed income market for their funding needs.

"Investors are able to access a variety of bonds issued by corporates, denominated in G3 as well as in Asian currencies. Asian bond markets offer a useful alternative to the bank lending channel and are expected to grow," she said.

As for infrastructure finance, Singapore is working closely with the EDHEC Infrastructure Institute to develop performance benchmarks for infrastructure debt and equity.

“While infrastructure assets can offer long-dated and inflation-protected returns, many investors have held back due to information asymmetry and lack of access to investment opportunities. [Singapore] will facilitate the progression of infrastructure into a distinct, investible asset class, which will feature more prominently in strategic asset allocation decisions,” she said.

As for forex risk management solutions, Loh highlighted that buy-side investors can tap on Singapore’s well-developed foreign exchange market, which stands at the third largest in the world.

“We are building Singapore into the Asian FX electronic trading hub by working with industry players that are keen to set up key market infrastructure such as e-trading platforms and matching engines. This will significantly improve trade execution, latency and pricing for Asia-based investors, and anchor price discovery of Asian FX in Singapore,” she noted.