http://www.channelnewsasia.com/stories/singaporebusinessnews/view/438751/1/.html
Prospects for Singapore's financial sector brighten, says SM Goh
By Asha Popatlal, Channel NewsAsia | Posted: 26 June 2009 2310 hrs
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Video
Prospects for Singapore's financial sector brighten, after stabilising economic data
SINGAPORE : Senior Minister Goh Chong Tong has expressed guarded optimism about the future of Singapore's financial sector.
Speaking at the 36th annual dinner of the Association of Banks on Friday, he noted that economic and financial indicators have started stabilising in recent months. But the senior minister also noted that downside risks remained.
Giving updated numbers, he also revealed that 3,600 investors who bought Lehman mini-bonds have been offered settlements, totalling more than S$100 million.
Shortly after the Lehman Brothers debacle in September last year, the global financial sector went into a tailspin.
Still, while Singapore's financial institutions weathered the crisis well, a significant number of Singaporeans suffered losses from having bought structured products related to Lehman. And many who had invested much of their life savings in the mini-bonds found that they were worthless.
Mr Goh said that as at end-May, more than 3,600 investors have been offered settlement worth a total of S$105 million on a no-admission-of-liability-basis. That is about two-thirds of all cases that had been decided - including 25 per cent who received full compensation.
More details are expected soon when the Monetary Authority of Singapore (MAS) releases the findings of its completed investigations. Broadly speaking though, Mr Goh, who is also Chairman of MAS, said financial institutions will need changes to both their business models as well as mindsets to win back the trust and confidence of consumers.
Mr Goh said: "We must not waste the current crisis. Whether as financial institutions, regulators or as consumers, this downturn has not only taught us new lessons, but also presented opportunities for the nimble and prepared."
Going forward though, Mr Goh said the sector needed to build on its talent pool and tap on the opportunities arising from the massive infrastructure needs and growing wealth in Asia.
He also said that Asian banks have emerged stronger. The financial sector has developed further in the past years, and while risks remain, the opportunities are certainly there.
Mr Goh said: "Rapid urbanisation will bring about more infrastructure projects, which can spur the growth of project financing in Asia. Demographic trends in Asia are expected to drive the demand for greater wealth planning, including asset management, as well as life and healthcare insurance products.
"Also, growing trade within Asia and with the rest of the world will drive financing opportunities."
Meanwhile, as investors shift towards demanding less complex and more transparent investment instruments, authorities are working to improve access to Singapore Government Securities (SGS), generally considered a liquid and safe investment alternative.
From next month, individuals can submit bids for these securities through ATMs. Eventually, such SGS could be listed on the Singapore Exchange to be traded, just like other stocks.
Mr Goh said: "By making SGS more accessible and more liquid, we hope to enhance the array of financial instruments that financial advisors can use to match their clients' needs."
In Singapore, such SGS are not used to fund government expenditures. Instead it works as a useful pricing benchmark for local corporations issuing bonds.
To further strengthen the financial sector, Singapore's central bank is now looking into enhancing the framework for the fixing of inter-bank rates. - CNA/ms
Prospects for Singapore's financial sector brighten, says SM Goh
By Asha Popatlal, Channel NewsAsia | Posted: 26 June 2009 2310 hrs
Photos 1 of 1
Video
Prospects for Singapore's financial sector brighten, after stabilising economic data
SINGAPORE : Senior Minister Goh Chong Tong has expressed guarded optimism about the future of Singapore's financial sector.
Speaking at the 36th annual dinner of the Association of Banks on Friday, he noted that economic and financial indicators have started stabilising in recent months. But the senior minister also noted that downside risks remained.
Giving updated numbers, he also revealed that 3,600 investors who bought Lehman mini-bonds have been offered settlements, totalling more than S$100 million.
Shortly after the Lehman Brothers debacle in September last year, the global financial sector went into a tailspin.
Still, while Singapore's financial institutions weathered the crisis well, a significant number of Singaporeans suffered losses from having bought structured products related to Lehman. And many who had invested much of their life savings in the mini-bonds found that they were worthless.
Mr Goh said that as at end-May, more than 3,600 investors have been offered settlement worth a total of S$105 million on a no-admission-of-liability-basis. That is about two-thirds of all cases that had been decided - including 25 per cent who received full compensation.
More details are expected soon when the Monetary Authority of Singapore (MAS) releases the findings of its completed investigations. Broadly speaking though, Mr Goh, who is also Chairman of MAS, said financial institutions will need changes to both their business models as well as mindsets to win back the trust and confidence of consumers.
Mr Goh said: "We must not waste the current crisis. Whether as financial institutions, regulators or as consumers, this downturn has not only taught us new lessons, but also presented opportunities for the nimble and prepared."
Going forward though, Mr Goh said the sector needed to build on its talent pool and tap on the opportunities arising from the massive infrastructure needs and growing wealth in Asia.
He also said that Asian banks have emerged stronger. The financial sector has developed further in the past years, and while risks remain, the opportunities are certainly there.
Mr Goh said: "Rapid urbanisation will bring about more infrastructure projects, which can spur the growth of project financing in Asia. Demographic trends in Asia are expected to drive the demand for greater wealth planning, including asset management, as well as life and healthcare insurance products.
"Also, growing trade within Asia and with the rest of the world will drive financing opportunities."
Meanwhile, as investors shift towards demanding less complex and more transparent investment instruments, authorities are working to improve access to Singapore Government Securities (SGS), generally considered a liquid and safe investment alternative.
From next month, individuals can submit bids for these securities through ATMs. Eventually, such SGS could be listed on the Singapore Exchange to be traded, just like other stocks.
Mr Goh said: "By making SGS more accessible and more liquid, we hope to enhance the array of financial instruments that financial advisors can use to match their clients' needs."
In Singapore, such SGS are not used to fund government expenditures. Instead it works as a useful pricing benchmark for local corporations issuing bonds.
To further strengthen the financial sector, Singapore's central bank is now looking into enhancing the framework for the fixing of inter-bank rates. - CNA/ms
