ETF market still in infancy, but Singapore should keep up with it

ON its own, the Singapore stock market is a drop in the ocean. Beyond the top 100, the bulk of the other 600-odd stocks listed here have average daily traded values of under S$1 million, market capitalisations of under S$1 billion, and annual revenues of under S$500 million. This will not pass the liquidity or size test of many global fund managers.

Within South-east Asia, Singapore is the largest market by total market capitalisation. But this position might not stay for long with the rapid development of neighbouring countries. Thailand, Indonesia and the Philippines are catching up fast.

Meanwhile, combined together, South-east Asian markets offer regional and international investors a tantalising prospect. The region is growing at above 5 per cent a year. Populations in developing countries such as Vietnam and the Philippines are young and hungry. As long as political stability persists, there is plenty of asset price appreciation ahead.