Infrastructure plans help capital markets grow

CREDIT is the financial oil that enables economies and commercial enterprises to operate smoothly. With the onslaught of new infrastructure projects coming on stream across Asia, the development of local capital markets has become of vital importance.

Two infrastructure projects in Singapore could trigger more capital markets activity - the North-South Corridor, which will connect the north of the island to the city centre via roads, cycling paths and walkways, and the Singapore-Kuala Lumpur High Speed Railway.

A strong local currency capital market is important for Singapore to diversify credit sources - creating an alternative to bank funding, and helping to recycle savings and investments from institutional fund managers, insurance companies and pension funds into development projects. Capital markets help to ensure that long-dated assets are funded by long-term investors, and that credit flows remain stable in times of volatility.