| SINGAPORE : Singapore's loans market is expected to growth by more than half to US$15 billion this year because of mega real estate and corporate deals likely to be sealed in the next six months or so.
The market is also being boosted by the booming commodities business in Indonesia, according to members of the Asia Pacific Loan Market Association who were speaking at a seminar on Wednesday.
Bankers in Singapore are expecting a solid pipeline of mega projects to support the loans business in Singapore in the second half of the year.
They say real estate deals such as the new Orchard Turn site, as well as the integrated resorts on the Marina Bay site are expected to come on stream.
And they expect corporate acquisitions to lend their weight, too.
Said Boey Yin Chong, co-chairman of the Asia Pacific Loan Market Association and senior vice president at DBS Bank, "The second half is going to be pretty strong. You have PSA buying into Hutchison -- that deal will probably close in the second half as well. And then you look at Toll buying into Singapore SembLog. That might necessitate a term out. We're not sure yet but that's another piece of activity that will certainly liven up the loan market in Singapore."
Bankers say Singapore's syndicated loans business is also helped by a growing number of Indonesian deals.
These deals are usually secured by Chinese and Indian state companies in the coal, oil, and gas sectors.
Said John Corrin, chairman of the Asia Pacific Loan Market Association and managing director at Calyon, "The structure is very attractive for lenders because they have a little less Indonesian risk they would do lending onshore to a domestic Indonesian company."
And he says Singapore will stand to gain as more issuances from Indonesia are expected with its recently upgraded sovereign ratings.
Mr Corrin said, "The general trend for Indonesia is the risk is improving. We've seen the spreads in the bond markets narrow very, very substantially. So they are falling very, very quickly, which is reflection upon more and more investors being keen to take Indonesian paper. This will reflect in more activity in the loan market as well. Singapore is really the financing centre for Indonesia, so a lot of the banks looking at this business are driving this business from Singapore."
Singapore's loans market amounted to nearly US$9.5 billion last year. - CNA /ct
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