Heng Swee Keat: Singapore’s investment banking industry and capital markets Keynote address by Mr Heng Swee Keat, Managing Director of Monetary Authority of Singapore, at the Singapore Investment Banking Association 30th Anniversary Dinner, Singapore, 6 October 2005. *  *  *  I am honoured to address this distinguished audience, and to join you in celebrating the 30th anniversary of the establishment of SIBA. May I thank the Chairman and the Committee for this honour. Global investment banking trends In the 30 years since SIBA's predecessor body, the Merchant Bankers Association, was set up, the business of underwriting and trading has been dramatically transformed. The globalization of capital markets, driven by liberalisation and technological advances, has created a web of interconnected markets. This has facilitated innovation and sharpened competition. Financial transactions now transcend sovereign borders as well as traditional product lines. Investors have also become more sophisticated and demanding, and a new array of products has evolved to meet complex needs. This has led to significant growth, for example, of derivatives instruments to complement the cash markets, including within Asia. Responding to these new challenges, investment banks have deepened capabilities, and many have also undergone significant consolidation, to achieve scale and depth. Beyond the traditional underwriting business, advisory and fees-related businesses have expanded. Investment banks also structure, market and trade in a full range of financial instruments - equities, fixed income, derivatives and hybrid instruments.

Similar to the American Depository Receipts or Global Depository Receipts offered in many other American or European exchanges, the Global Depository Receipts to be offered by SGX will allow foreign companies greater exposure in the Singapore market and provide them with a wider international shareholder base. It will help to boost the company's prestige in its local market, in being traded internationally, while also encouraging greater liquidity for the company's shares. We believe that this new product will provide investment bankers in Singapore with a wider range of solutions when advising companies keen on tapping Singapore's capital markets for fund raising. MAS is also considering how best we can treat corporate bonds as regulatory liquid assets of banks. This is in response to market feedback from SIBA, and is expected to increase demand from banks in Singapore for corporate bonds. This will eventually attract more corporate debt issuance in Singapore and further the development of our debt markets. MAS will be consulting the industry on this initiative in due course. To help generate further buzz in the Singapore market, SIBA can make use of its extensive network of experts to organize seminars and conferences to bring investors, bankers and other market practitioners to discuss new areas of interest and to gain wider understanding of the developments in the Singapore capital markets. SIBA and its members can also help to identify investment instruments that will better service clients' needs, and facilitate the development of such instruments in Singapore.