Governance standards must constantly be nudged upwards

WHILE the Singapore economy has long been "promoted" out of the ranks of developing countries, the status of its capital markets remains a bit of an open question.

IG Markets states that "a developed economy is considered to be stable and have a relatively high level of economic growth. Its capital markets are developed, with a high level of regulation and oversight, a market exchange and good liquidity in its debt and equity markets". Investopedia says "emerging markets generally do not have the level of market efficiency and strict standards in accounting and securities regulation to be on par with advanced economies (such as the United States, Europe and Japan), but emerging markets will typically have a physical financial infrastructure including banks, a stock exchange and a unified currency".

With attributes such as openness to foreign ownership, ease of capital movement and efficiency of market institutions, the Singapore capital market would well qualify as "developed". Yet liquidity is wanting in both the debt and equity markets, so Singapore might reasonably be classified as still emerging; however, it would be pointed out that its borders have been opened by deregulation and investors have at their disposal a wide array of financial instruments from "plain vanilla" equities to more exotic securities like structured warrants, daily leveraged certificates and contracts for differences. Furthermore, there is a strong international element to the mix of listed companies.