BANKS IN SINGAPORE SET TO INCREASE SECURITISATION
Banks in Singapore are planning to
further expand their treasury, securities, equities and debt
instruments activities in line with global financial markets,
bankers and economists told Reuters.
    "Banks are moving towards treasury activities because they
see them as a vital link in global capital and foreign exchange
markets," Clemente Escano, vice-president of Union Bank of
Switzerland, said.
    Central to that link is the Asian Dollar Market's pool of
funds, with deposits estimated at 212 billion dlrs in March.
    Banks are fond of booking and tapping offshore Asian Dollar
Market funds here for a variety of reasons, including low
taxes.
    New impetus has come to this market with growth of 52
billion dlrs in the year to March partly due to the
liberalisation of financial markets in Japan leading to an
increase in interbank activity, bankers said.
    Despite the slowdown in traditional loan syndications in
the region, the offshore market has continued to grow as banks
rebundle and securitise their assets, creating new generations
of tradeable debt instruments, bankers said.
    Singapore's daily turnover in foreign exchange dealing has
increased to 30 billion U.S. Dlrs in 1987 against 21 billion
last year, according to Finance Minister Richard Hu.
    Susumu Sakaguchi, manager of Dai-Ichi Kangyo Bank, said the
22 Japanese banks in Singapore were expanding their foreign
exchange departments, which accounted for at least 30 to 40 pct
of total bank activities last year.
    Sakaguchi said the liberalisation of the Toyko market
stimulated Asian Dollar deposits and foreign exchange turnover
and is leading to active Japanese futures trading on the
Singapore International Monetary Exchange.
    Robin Tomlin, managing director of Singapore International
Merchant Bankers Ltd, said international merchant banks cluster
in Singapore because of the tax incentives, presence of major
players and shift in regional capital flows.
    Tomlin pegged much of the future of the Singapore banking
industry to securities and equities.
    "In 1988 we should see an expansion of securities trading
following the link-up" of the Stock Exchange of Singapore
Dealing and Automated Quotation System (SESDAQ) with the London
exchange and the National Association of Securities Dealers
Automated Quotation System (NASDAQ), he said.
    Equity and equity-linked issues have dominated the
financial markets here to date because of buoyant domestic and
international stock markets. Tomlin said privatisation
programmes, both in Singapore and abroad, would encourage huge
flows of capital through the banks.
    Applications received for the 30 mln Singapore Airline
shares offered last week were worth 601.1 mln Singapore dlrs.
The share offer by Sembawang Maritime Ltd raked in a record 6.8
billion Singapore dlrs in May this year.
    Bankers said Singapore's privatisations and links with
exchanges abroad showed its determined international stance.
    Singapore's four major local banks have been venturing into
stockbroking, the new government securities market and SESDAQ,
competing successfully for business with the merchant banks.
    Tomlin said merchant banks will continue to play an
important role in the Singapore domestic capital markets but
the modest size of the total market would limit the potential
of new entrants.
    Bankers said a total of 650 mln U.S. Dlrs was raised in the
Singapore capital market last year and the volume of new issues
would to grow in 1987.
    Total lending by banks in Singapore fell by 1.04 billion
dlrs in March 1987 compared with last year following the trend
towards asset management services and other capital market
activities.
    Hans-Rudolf Schaub, the senior vice-president and manager
of Swiss Bank Corp, said his bank has chosen Singapore as its
Asian treasury centre because of favourable tax rules for
offshore banks, political stability and economic growth.
    He said the bank might set up a securities portfolio
management service here in addition to its existing links in
international money market services with Zurich and New York.
 REUTER
