Singapore's asset management industry shows strong growth; AUM up 30% to S$2.36 trillion in 2014

SINGAPORE'S asset management industry grew strongly last year, with more sovereign wealth funds setting up offices here.

Assets under management (AUM) rose by 30 per cent to S$2.36 trillion in 2014 from S$1.82 trillion in 2013, said the Monetary Authority of Singapore's (MAS) annual report 2014/15 released on Tuesday.

"Allocation to Asia-Pacific investments accounted for two-thirds of total AUM, reflecting continued global investor interest in the region," it said.

More sovereign wealth and pension funds also set up offices in Singapore to access the investment opportunities in the region.

In late 2014, La Caisse de dépôt et placement du Québec, one of Canada's leading fund managers, set up an office in Singapore, joining Investment Company of The People's Republic of China, Norges Bank Investment Management and the Swiss National Bank, said MAS. La Caisse de dépôt et placement du Québec manages primarily public pension and insurance plans.

South Korea's National Pension Service has also decided to set up an office in Singapore in 2015, said MAS.

There were 335 fund management companies as at end-March 2015, up from 289 in 2014.

Singapore continued to grow strongly as a trading hub for foreign exchange (FX), and financial and commodity derivatives.

Average daily FX turnover volume in Singapore rose by 40 per cent to US$478 billion in October 2014, from US$344 billion a year ago, according to a Singapore Foreign Exchange Market Committee survey.

Total futures and options volume on Singapore Exchange (SGX) in 2014 rose 7.4 per cent to hit a new high of 120 million contracts over the same period. SGX AsiaClear iron ore futures volume was two million, more than 30 times a year earlier.

FTSE China A50 futures volume almost doubled to 41 million contracts from 22 million contracts in 2013. INR/USD FX futures trading totalled almost 600,000 contracts in 2014, following its launch in November 2013.

Singapore's corporate debt market also expanded, rising 13 per cent in 2014.

The market attracted a range of issuers including Lion City (RMB) bonds, Basel III-compliant Tier 1 securities and Islamic sukuk. In 2014, the total issuance of RMB bonds in Singapore exceeded 35 billion yuan (S$7.74 billion), more than double from the year before.

Bank lending remained strong, with total assets in the banking sector rising by 9 per cent to S$1.06 trillion.

However, a slowdown in regional economic growth and fall in commodity prices have led to a slowdown in overall trade and total outstanding trade finance intermediated in Singapore fell by 16 per cent over the past year to S$194 billion.

The offshore insurance sector also grew, catering to the region's specialist insurance needs.

Offshore non-life insurance grew 8.8 per cent year on year in gross written premiums, supported by expansion in both the direct and reinsurance segments.

The proportion of offshore non-life insurance to total non-life insurance has increased steadily, rising to 66 per cent in 2014 from 58 per cent in 2009, reflecting Singapore's strong position as a regional specialist reinsurance hub, said MAS.

"Looking ahead, the non-life insurance market in Asia is expected to continue its growth momentum, with Southeast Asia and emerging countries like China and India leading premium growth in 2015."