A STUDY OF THE SINGAPORE GOVERNMENT SECURITIES MARKET

Abstract

Although Treasury Bills were first issued in 1923 and Government bonds in 1959, the Singapore Government Securities Market is still relatively underdeveloped compared to other financial centers in the world. This academic exercise seeks to find out what are the limiting factors to the growth of this market and recommendations are put forward to counter the challenges this market will face in the years to come. As this is a qualitative study of the market, source of material rest heavily on newpaper, business magazine articles and textbooks as there is not much of academic research conducted in this area. A questionnaire survey and interviews are also conducted to make this exercise a more complete one. An introduction to major government securities markets starts off this academic exercise. After explaining the objectives of this study and the methodology undertaken, the reader will be introduced to the types of Singapore Government Securities available in the local market and how the market trades in them. Calculations relating to market trading will also be introduced. Next, readers will be presented to a review of the old market structure and the new market structure which was brought into reality. in May 1987. In this part of the exercise, reasons and arguments extracted from newspaper and business magazine articles are put forward to explain the relative poor performance of the old market structure, the restructure of the market in May 1987 and the market performance since then. In the last part of this exercise, research findings from a questionnaire survey and interviews with bankers and dealers will be presented to see if the reasons and arguments presented in the earlier part match with that of market players. Finally, conclusions and recommendations made with regard to the Singapore Government Securities Market.