Singapore Monetary Authority Plans New Corporate Structure for Investment Funds

The Monetary Authority of Singapore (MAS) today commenced a public consultation on a new corporate structure for investment funds – the Singapore Variable Capital Company (S-VACC).


Lawrence Wong, Minister for National Development and Second Minister for Finance, said  that the the S-VACC structure would offer asset managers greater flexibility and lower costs, according to releases.


Currently, there are three types of structures used by investment funds in Singapore, namely unit trusts, companies formed under the Companies Act and limited partnerships. The S-VACC seeks to complement these existing structures with one that is tailored for investment funds. With the S-VACC framework, MAS seeks to offer a flexible and efficient platform for fund managers to co-locate fund domiciliation with their substantive fund management activities in Singapore and further deepen the asset servicing ecosystem.


The proposed S-VACC framework is intended to cater to both open-ended and closed-end1 investment funds, and allow for segregation of assets and liabilities of sub-funds within an umbrella structure. This will allow asset managers to achieve cost efficiencies by consolidating administrative functions at the umbrella fund level. In addition, S-VACCs would be allowed to maintain their respective registers of shareholders, but would be required to disclose the registers to supervisory and law enforcement agencies where necessary.


The S-VACC is proposed to be limited to investment fund purposes only, and would be required to have a fund manager which is regulated by MAS. Shares of the S-VACC would generally be issued and redeemed at net asset value to ensure accountability and transparency for creditors.


MAS further proposes that the incorporation of S-VACCs be governed by a new Act, under which the Accounting and Corporate Regulatory Authority (ACRA) would act as the registrar of S-VACCs, while MAS would oversee the anti-money laundering obligations of S-VACCs.

Index tracking prices of non-landed private apartments in Singapore were overall unchanged in January,  as resale prices of completed private homes in central region’s slight increase offset by the drop of those in the non-central region, flash estimates from the NUS Singapore Residential Price Index (SRPI) showed.

Prices of homes in the central region, excluding small units, climbed 0.7% in January from December, while those in the non-central region dropped 0.6%. Prices of small units, which have a floor area of 506sqf or below, increased 0.1% during the month of January when compared with a month ago.

Prices of homes in the central region, excluding small units, went down 0.6% in December, while those in the non-central region climbed 0.4%. Prices of small units, which have a floor area of 506sqf or below, slid 0.2% during the month when compared with a month ago.

Singapore Residential Price Index (SRPI) is compiled by the National University of Singapore’s(NUS) Institute of Real Estate Studies. It is a transactions-based index that tracks the month-on-month price movements of private non-landed residential properties in Singapore.  A small unit has floor area of 506 square feet or below.

– APMR News



Singapore economy expanded 2.0% in 2016, the trade and industry ministry(MTI) said. The MTI has maintained the GDP growth forecast at “1.0 to 3.0%” for 2017.

The 2% economic growth was mostly driven by the last quarter growth which expanded 2.9% year-on-year. On seasonally-adjusted annualised basis, the Q4 GDP expanded by 12.3% from the Q3, reversing the contraction of 0.4% in the third quarter.

By sector, the MTI said the manufacturing sector grew by 11.5%  year-on-year in the last quarter, accelerating from the 1.8% growth in the preceding quarter, led by growth in the electronics and biomedical manufacturing clusters. The electronics cluster was supported by a recovery in global semiconductors demand, while the biomedical manufacturing cluster was boosted by output growth in both the pharmaceuticals and medical technology segments, the ministry said.

On a quarter-on-quarter seasonally-adjusted annualised basis, the manufacturing sector rebounded strongly from the 5.0 5 decline in the third quarter to growth of 39.8% in the fourth quarter.

The construction sector shrank by 2.8% cent year-on-year, extending the 2.2% contraction in the previous quarter. Growth was weighed down primarily by the decline in private sector construction activities. On a quarter-on-quarter basis, the sector expanded at a seasonally-adjusted annualised rate of 0.8 per cent, a reversal from the 12.6 per cent contraction in the preceding quarter. The wholesale & retail trade sector grew by 0.4 per cent year-on-year, slightly faster than the 0.1 per cent growth in the third quarter. Growth was supported by the wholesale trade segment, which expanded on the back of a pick-up in oil and non-oil trade.

The retail trade segment, on the other hand, registered flat growth. On a quarter-on-quarter seasonally-adjusted annualised basis, the sector expanded by 2.2%, up from 1.7% growth in the previous quarter.


Article also available at  APMR

Singapore November Retail Sales Climbed 1.1% from a year ago, lifted by vehicle sales which rose 17% year on year during the month, according the data released by the statistics department

Singapore at night

Singapore’s economy expanded 1.8% in the fourth quarter of 2016 from same quarter a year ago, led by manufacturing and service sectors, according to data released by its Trade and Industry Ministry. The data showed its construction sector continued to shrink.

Manufacturing sector expanded 6.5% in the Q4 from a year ago, up from 1.7% year on year growth in the third quarter. Service sector registered 0.6% yearly growth, up from 0.3% growth in the earlier quarter.

The data at the same time showed construction sector continued to shrink, which shrank 2.8% in the fourth quarter, more than the 0.2% year on year shrank registered in the third quarter of the year.

In the year of 2016, manufacturing sector registered 2.3% yearly growth, service sector grew 0.9% while construction sector expanded 1.3%, the trade and industry ministry said.


DBS Bank said today that it will acquire the wealth management and retail banking business of ANZ in five markets including in Singapore, Hong Kong, China, Taiwan and Indonesia, for approximately SGD 110 million  above book value.

The portfolio of businesses being acquired represents total deposits of SGD 17 billion, loans of SGD 11 billion, investment AUM of SGD 6.5 billion and total revenue of SGD 825 million for FY2016. They serve about 1.3 million customers, of which over 100,000 are affluent/ private wealth customers and 1.2 million are retail customers.


DBS expects the transaction to create significant value for the bank. With its scale in the five markets, it will be able to bolt on the ANZ business to its existing platform, and benefit from efficiencies especially in technology and branch distribution. The transaction is expected to be ROE and earnings accretive one year after completion. DBS said the it made the transaction for cementing its position as a leading wealth manager in Asia, to enable rapid scale-up of digital strategy in Indonesia and Taiwan and to creates financial value – ROE and earnings accretive one year after completion.


Over the past five years, DBS has consistently grown its wealth management business and is today among the top five private banks in Asia. With the acquisition, DBS will add SGD 23 billion in wealth AUM to its books, with high net worth clients accounting for SGD 6 billion. This will take DBS’ high net worth AUM and total wealth AUM to SGD 115 billion and SGD 182 billion respectively.


The acquisition will also add a large customer franchise to DBS in Indonesia and Taiwan, which are key markets for the bank. In Indonesia, DBS will gain about 410,000 customers, effectively increasing its base by six times. In Taiwan, DBS will add around 530,000 customers, expanding its base by 2.5 times. A significant portion of these are credit card customers. With a larger scale in both markets, the bank will be able to fast-track the build-out of its digital strategy.


Tan Su Shan, DBS Group Head of Consumer Banking & Wealth Management of DBS, “Over the years, DBS has made significant strides in the wealth business, and recently became the first Singapore and Asian bank to break into the top five private banks in Asia-Pacific. This acquisition will further cement our leadership position. It also gives ANZ’s wealth customers access to more tailored solutions and a full suite of universal banking products supported by Asian insights, research and investment advice. At the same time, the transaction provides us with a significant consumer platform in Indonesia and Taiwan that will enable us to more quickly build out our digital agenda.”



NZ Chief Executive Officer Shayne Elliott said: “Our strategic priority is to create a simpler, better capitalised, better balanced bank focussed on attractive areas where we can carve out winning positions. “Asia remains core to ANZ’s strategy. This transaction simplifies our business while allowing us to continue to benefit from higher levels of growth in the region through a focus on our largest, most successful business in Asia – banking large corporate and institutional clients driven by trade and capital flows particularly with Australia and New Zealand. “By focussing our resources in Asia – whether that is capital, technology or people – on Institutional Banking, we can continue to build a world-class, capital efficient business by strengthening our network and the support we provide to our key institutional clients. “In Retail and Wealth, although we have grown a profitable business in Asia, without greater scale ANZ’s competitive position is not as compelling.

“Having looked carefully at the business in recent months, it is clear the environment we face has changed and to make a real difference for our Retail and Wealth customers, we would need to make further investments in our Asian branch network and digital capability. Further investments do not make sense for us given our competitive position and the returns available to ANZ,” Mr Elliott said.


ANZ said it will focus on the Group’s core Asian business in Institutional Banking. The Retail and Wealth business being sold includes AUD 11 billion in gross lending assets, AUD 7 billion in credit risk weighted assets and AUD 17 billion in deposits. In the 2016 financial year, the business accounted for approximately AUD 825 million in revenue and net profit of AUD 50 million. Most people currently employed in ANZ’s Retail and Wealth business will join DBS providing continuity for customers and greater opportunities for staff.  Sale price represents an estimated premium to net tangible assets at completion of AUD 110 million. ANZ will take a net loss of AUD265 million including write-downs of software, goodwill and property, and separation and transaction costs. The impact is expected to be slightly higher in the first half of FY2017, but offset back to ~$265m in subsequent periods.  ANZ said the sale is expected to increase ANZ’s CET1 capital ratio by around 15-20 basis points and is expected to be broadly EPS and ROE neutral. The transaction is subject to regulatory approvals in each market with completions anticipated over the next 18 months progressively from mid-2017.



Transaction Terms and Funding

DBS said the transaction is not expected to have a material impact on DBS’ capital position, earnings or net asset value per share this year. The acquisition of the businesses in each jurisdiction is independent of each other. Subject to obtaining regulatory approvals, the transaction is anticipated to be completed progressively from 2Q2017 onwards, and the target is for full completion in all markets by early 2018.

Singapore Exchange (SGX) today announced the launch of the SGX APAC ex Japan Dividend Leaders REIT Index, composed of 30 real estate investment trusts (REITs) across the Asia Pacific ex Japan region. It will be the first SGX index to be used as a benchmark index for a new exchange-traded fund (ETF), which will be issued by Phillip Capital Management (S) Limited (Phillip Capital Management), the asset management arm of Phillip Capital.

The index is the first of its kind, comprised entirely of REITs in the Asia Pacific region that are dividend weighted, whilst also becoming accessible through an ETF. The dividend-weighted index measures the performance of REITs that pay the largest dividends within the Asia Pacific ex Japan region, providing investors with the opportunity to participate in a portfolio offering significant and sustainable yields. The index’s total return over the twelve months to 29 July 2016 was 19.97%, demonstrating a yield over the same period of 4.53%.

Phillip Capital Management’s ETF, which will be listed on SGX, highlights the growing investor interest in ETFs in the region and attests to SGX’s status as the regional hub for REITs. The region’s ETF market is fast developing and poised for strong growth, with ETF assets in Asia expected to reach US$560 billion by 2021.

Loh Boon Chye, CEO of SGX, said, “I am delighted with the launch of our first Pan-Asian index and that it will be used as a benchmark for an ETF. As SGX’s first truly regional index, it broadens our offering beyond the Singapore equity market, demonstrating our continued push to provide investors access to diverse opportunities. The demand for index-linked investment opportunities is increasing rapidly across Asia, and SGX is committed to supporting this growth through our comprehensive index services.”

Jeffrey Lee, MD and Co-CIO of Phillip Capital Management, said, “We are very excited to be working with SGX on producing a unique index where the underlying REIT constituents are weighted by total dividends paid in the preceding 12 months. The prospective ETF will offer investors transparent and low cost access to a diverse basket of quality REITs, many of which we have been investing in over the past decade through our actively-managed REIT funds. In view of the growing demand we see from our investors for sustainable income and the rise of passive investing, this is a highly opportune time to launch the first Asia Pacific REIT ETF comprising the region’s largest dividend-paying REITs.”

The SGX APAC ex Japan Dividend Leaders REIT Index captures over 70% of the region’s REIT universe by total capitalisation, taking into consideration size, free-float and liquidity.  All constituent weights are capped at 10% to ensure greater portfolio diversification. The index was designed and built using SGX’s in-house index engineering expertise, in consultation with Phillip Capital Management.



The Directors of Singapore Exchange (SGX) names Mr Kwa Chong Seng to succeed Mr Chew Choon Seng as Chairman of the Board.

Chew will be retiring at the conclusion of SGX’s Annual General Meeting on 22 September 2016, and will not be standing for re-election. He joined the Board in December 2004 and has been the Chairman since January 2011.

Kwa was elected to the Board in September 2012. He was appointed the Lead Independent Director in December 2013, and has been the Chairman of both the Nominating & Governance and the Remuneration & Staff Development Committees since September 2013.

Chew said, “The exchange is an important component of Singapore’s financial system. It has been an honour to be of service and I am thankful for the support and cooperation of my fellow Board members and all the people, inside and outside the organization, whom I have worked with. I trust that Mr Kwa will enjoy the same. Mr Kwa’s capabilities, experience and accomplishments in industry, business and public service are well known and highly regarded. SGX will definitely be well steered.”

Commenting on his new appointment, Kwa said, “I am honoured to have this opportunity to contribute. Filling Mr Chew’s big shoes will be difficult as SGX has many stakeholders who all want SGX to succeed. I will do my best to serve these important stakeholders.”

Singapore river