Market Summary

Yield Movements

Between 31 August and 15 October, Singapore's local currency (LCY) government bond yields declined for all tenors. The slightly falling yields at the shorter end of the yield curve reflected improving liquidity, supported by the declining 6-month swap offer rate, which is a benchmark borrowing cost for offshore investors. Yields of longer-term tenors recorded smaller declines. The yield curve for Singapore LCY government bonds shifted downward during the review period amid policy easing by Monetary Authority of Singapore. Investors' flight to safety contributed as well, spurred by a weak global economic growth outlook and geopolitical risks in the region.

Size and Composition

Singapore's LCY bond market expanded 4.9% quarter-on-quarter in the third quarter of 2019 to reach SGD445.6 billion (USD322.4 billion) at the end of September from SGD424.7 billion at the end of June. On an annual basis, growth was up 11.9%. The rise in the LCY bond market was supported by growth in both government and corporate bonds, which accounted for 62.2% and 37.8%, respectively, of total LCY bonds outstanding at the end of the third quarter of 2019.

Policy, Institutional and Regulatory Developments

On 6 August, Monetary Authority of Singapore issued new rules to enhance the cyber resilience of the financial sector. These rules are meant to manage the risks of cyber threats. Financial institutions are required to develop and implement security measures for their information technology systems. They must also ensure timely responses to security flaws in their system, preventing external attacks and malware risks. Industry players are expected to develop measures that prevent unauthorized access to data, enhance the security of access to accounts, and improve user authentication and access to customer information.