Singapore saw its lead over Hong Kong shrink to just a whisker in the battle to be Asia’s biggest foreign-exchange currency hub. To keep its advantage, the island state wants to attract more companies to set up electronic trading platforms.
Average daily trading in Singapore jumped 22% to a record $633 billion in April from the same period in 2016, according to the latest survey by the Bank for International Settlements. That’s just ahead of Hong Kong’s $632 billion, as the Chinese city saw a 45% surge in daily transactions.
Singapore has enticed UBS Group AG, Citigroup Inc, Standard Chartered Plc and JPMorgan Chase & Co. in the past year to set up FX pricing and trading engines so that investors can reduce the time lag from routing trades elsewhere. That’s helped it take market share from Japan, while competing against Hong Kong that’s at the forefront of the yuan market.
The Southeast Asian nation will need another three to five major players to build electronic trading platforms to achieve “critical mass” over the next year, according to Benny Chey, assistant managing director of development and international at the Monetary Authority of Singapore.
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