Singapore-based wealth managers acting on behalf of high net worth individuals in the city state are the main contributors to a surge in liquidity that has driven growth in the Singapore dollar-denominated bond market, according to bankers speaking at the Euromoney Global Borrowers and Asian Investors Forum on September 15.
“Low interest rates have pushed private banks to be more involved in [bond] issuance in [the Singapore dollar] space which has changed the pricing environment for Singapore,” said Clifford Lee, head of fixed income at DBS.
He noted that much of the approximately SGD85 billion-SGD90 billion (US$64.5 billion-US$72.57 billion) difference between Singapore dollar deposits and loans in the city state are attributable to wealth managers.
HSBC’s James Fielder, Asia head of local currency syndicate, also noted that private banks accounted for around 50% of the order book for at least four recent Singapore dollar bond issues led by the bank this year.
Among these was a SGD100 million five year bond from Hyflux, priced on July 14.