The largest financial institutions are big players on these markets, which operate according to private and decentralised mechanisms. Total notional liabilities on OTC derivative markets rose from USD 72,000 billion in June 1998 to USD 88,000 billion at end 1999. The average daily turnover on these markets increased by 50% between April 1995 and April 1998. •  Users’ desire to improve efficiency has also driven the evolution in market structures. Planned links between stock markets, particularly in Europe, and the consolidation of delivery-vs-payment systems testify to these concerns. Domestic trading floors with regular working hours are gradually giving way to electronic international markets open around the clock. And the official trading systems of the various financial centres are in turn being challenged by private trading systems such as Electronic Communication Networks. Third: new demands for transparency and profitability in the financial industry Spurred on by this competitive pressure, the principles of corporate governance and value-adding have taken root, in particular under the impetus of fund managers. These principles force players to meet new requirements in terms of transparency and profitability. Such requirements encourage participants in the global market to adopt new investment behaviour, in particular with the spread of index-linked management or massive recourse to leveraging. These objectives also result in the use of fairly homogeneous risk management techniques, such as the definition and use of limits, risk management with value-at-risk models and the development of stress testing.

Besides accessing global capital, a listing on the Singapore Exchange also helps the companies create overseas brand awareness and broaden shareholder base. It is an effective enabler in assisting the Chinese companies to pursue their international business strategies. Today, there are 143 Chinese companies listed on the Singapore Exchange. These Chinese listings cover a wide range of industries, including manufacturing, services, real estate, transportation, pharmaceutical and many other rapidly growing industry sectors. Particularly, some Chinese companies have chosen to leverage on Singapore’s competitive advantages in certain sectors including real estate and shipping. In the real estate sector, Singapore has attracted Yanlord Land Group, a leading developer of high-end residential properties in China, and CapitaRetail China Trust, the world’s largest China REIT, to list in our equity market. Yangzijiang Shipbuilding and Cosco Corporation, China’s largest shipbuilders, have also chosen Singapore as their international listing destination. Regional growth I expect Chinese companies’ regionalisation efforts to continue, notwithstanding the recent market volatility. The recent subprime crisis in the United States has dented investors’  BIS Review 46/2008  1  confidence but it is important to take a longer term view. The medium and long-term fundamentals of Asian economies are strong, driven in no small part by China’s economic engine. I believe we will continue to see strong intra-regional trading volumes and wealth creation. As the Asian economies grow, opportunities will arise in the capital markets for financing Chinese companies’ regionalisation, if not, globalisation efforts.