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The Singapore bond market has become an
important, open capital market in Asia over the past decade. It has grown
considerably in terms of size, depth, and liquidity.
Sovereign bonds and statutory board bonds are a vital feature, despite the
government?s strong fiscal position - not requiring deficit financing,
Singapore Government Securities (SGS) are issued primarily to stimulate
market activity and to provide a benchmark for corporate issues. Statutory
Board papers, issued by autonomous government agencies, are considered the
most liquid among debt instruments on the Singapore corporate bond market.
Special Purpose Vehicles (SPVs) are the major issuers of corporate debt
securities in the market, with structured debt comprising a large portion of
SGD-denominated issues. Structured products include equity-linked notes,
convertible bonds, credit-linked notes, and asset securitization
transactions.
To attract greater foreign interest, the Monetary Authority of Singapore
began internationalizing SGD in 1998, with foreign entities allowed to issue
SGD-denominated bonds. Singapore?s debt market has grown to become an
important source of financing for local and foreign corporations,
international organizations, and governments.
Islamic finance is growing in importance. In 2005, Singapore was accepted as
a full member of the Islamic Financial Services Board (IFSB), an
international body based in Malaysia that defines regulatory and supervisory
standards governing Islamic financial services.
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