Nonetheless, the 115 investors who participated in FinanceAsia's local currency poll 2001 still say that the market has plenty of scope to develop further. Although the results showed clearly that the government has played an important supporting role — 43% of participants said it was excellent — they also suggested that it could be doing more to increase liquidity, with 38% deeming this to be below average.
"There has been a good effort by the authorities, but the issuance of new paper is not based on funding needs and therefore is always going to be limited," says one fund manager.
"I am not satisfied because secondary market liquidity is poor, especially for larger size trades," adds another. "We need critical mass. Market makers must run deeper books."
A lack of transparency and information is another area that investors think could be bettered, with almost a fifth saying this was unacceptable at present, and another 37.5% thought that more hedging instruments are required.
"We want to see more long-term issues and to see a market for hedging instruments develop, such as a futures market," says one respondent to the poll.
In fairness, the Monetary Authority of Singapore (MAS) has recognized this need and at the end of June introducted a a five-year government bond futures market, developed by Singapore Exchange Derivatives Trading.
As far as lead managers go, DBS Bank was the investor's choice as the best overall for origination, sales and trading category, gaining 40% of the vote ahead of Citibank (31%) and HSBC (18%).
DBS was also voted top dog as the bank used most often for primary issues. Using a weighted system in which three banks could be selected with the best bank gaining five points, the second place three and where a single point was given for third spot, DBS had a score of 50, again ahead of HSBC, this time second with 48, and Citibank with 32.
HSBC gained some compensation in the areas of credit research and best foreign bank in secondary local bond issues, winning both categories. The bank's weighted score of 36 in the research category beat off challenges from Citibank and JPMorgan, both of whom scored 27, while its score of 53 gave it the edge over Citibank — the bridesmaid in our poll — with 47 and Deutsche Bank coming in third with 36.
