Singapore

Abstract

Singapore’s domestic financial markets are gradually expanding in size and liquidity. The country’s equity market features growing market capitalization and liquidity, while its bond market, though still thinly traded, is expanding on a primary basis. The Singapore dollar (SGD) currency market is quite active, particularly onshore (though it receives substantial scrutiny from the Monetary Authority of Singapore (MAS), the country’s primary regulator). In addition to financial instruments, Singapore’s geographic location and its role as a centre of commerce and shipping have allowed it to generate significant trading in commodities and energy products. The country’s local derivative market is in the developing stages: local derivatives are still limited in availability and liquidity, primarily as turnover in the underlying cash markets is still growing; in addition, the MAS is a strict regulator which does not encourage the development of derivatives based on local indicators. Despite these limitations Singapore has managed to create for itself a successful niche in the global derivative markets by developing a series of listed and OTC derivatives based on important international references.