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SINGAPORE : Singapore Exchange (SGX) has announced a new tie-up as part of efforts to develop new financial products for the market.
A memorandum of understanding was signed on Friday with the Risk Management Institute of the National University of Singapore (NUS).
They plan to create financial products to enhance risk management for investors.
Three key areas have been identified - credit derivatives, property derivatives and carbon trading.
The tie-up between SGX and NUS aims to bring together the skills of both parties to develop products through research to maintain Singapore's position as a centre of excellence for risk management and financial innovation for Asia.
When developed, the three key products - credit derivatives, property derivative and carbon credits - could be the first in Asia.
These are emerging areas for investors with an increased awareness of individual carbon footprints, as environmental issues come more apparent.
Experts said there is growing interest for exchange traded applications with clear price transparency amid the current market volatility.
Chew Sutat, Executive Vice President, Singapore Exchange, said, "Well it's early days in the MOU that we signed...today. We've identified three specific areas, which we believe are going to be very important (for) the Asia capital markets going forward - property derivatives, for instance...the recent turn of events in the US on a credit market have highlighted a need for effective risk transfer mechanisms."
There are no indications yet as to when the new financial products will be ready. - CNA/ms
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