Singapore’s financial sector is set to capitalize on integration with the ASEAN Economic Community (AEC), China and India where robust economic growth will support the demand for international banking services, according to Monetary Authority of Singapore (MAS) deputy managing director Jacqueline Loh.
The advantages Singapore has include a well-regulated banking environment, a wide variety of services, a skilled labor pool, and a large amount of experience in facilitating global money transfers for investment and trade purposes.
Economists expect that the demand for services in Singapore will increase along with the growth of emerging economies surrounding it. The country has the largest stock exchange in Southeast Asia, and is largely considered the most important financial hub in Asia after Hong Kong.
“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,” added Loh.
The Asian Development Bank claims that by 2030, the GDP of China, India and the Association of Southeast Asian Nations (ASEAN) will increase by a factor of four and will be greater than Europe and the United States together.
Several different measures to promote investment throughout ASEAN have recently emerged. For example, the ASEAN Exchanges initiative will link the stock exchanges of Thailand, Malaysia, Vietnam, Indonesia, the Philippines and Singapore so that traders in Southeast Asia can easily invest throughout the region.
Similarly, China plans to link the Shanghai and Hong Kong stock exchanges so that mainland investors can have access to stocks listed in Hong Kong, and foreigners with a Hong Kong brokerage account can invest in the Chinese stock market that is now worth US$4.2 trillion. While highly anticipated by investors, the details have not been finalized and there is no estimated date for completion.