Singapore Showcases Growing Role in Regional Bullion Market at 2nd Asia Pacific Precious Metals ConferenceBy SBMA
Singapore Bullion Market Association (SBMA), with the support of Enterprise Singapore, welcomed 358 delegates from 173 companies in 29 countries to the second Asia Pacific Precious Metals Conference in early June. The event, which is a platform for developing and strengthening a unified body in ASEAN and Asia Pacific for the bullion market, brought together industry participants and stakeholders for two days of discussions, sharing of best practices, networking, and more.
The growth of the conference since its inaugural edition in 2017 is “an indication that Singapore has become a strong, vibrant marketplace for gold marketplace participants”, Guest of Honour, Deputy Chief Executive of Enterprise Singapore, Mr Ted Tan, said in his opening address. He highlighted that the continued shift of global gold demand to the east bodes well for Singapore, which is strategically located between mineral-rich countries and major demand centres, and that the country is well-positioned to facilitate such international trade flows, given its strong network of precious metals players and ecosystem of supporting services.
Mr Tan also pointed out that the volume of gold traded out of Singapore has been growing at a five-year compound annual growth rate of 40%, reaching over 1,700 tonnes in 2016. The total traded volume of precious metals scrap grew even faster, at a compound annual growth rate of 124%, reaching 520 tonnes in 2016.
The conference also witnessed the signing of a memorandum of understanding (MOU) between Vietnam Gold Traders Association, represented by Deputy Chairman Mr Do Minh Phu, and SBMA, represented by Chairman Mr Martin Huxley, to foster closer cooperation between Singapore and Vietnam on the development of the Vietnamese gold market.
According to Mr Huynh Trung Khanh (Managing Director, Vietnam Gold Consultants), who spoke at the conference roundtable on ASEAN gold markets, Vietnam’s gold market is going through a period of liberalisation – there will be no more licensing on jewellery manufacturing and trading, and the state will allow the import of raw gold material by key jewellery manufacturers. Additionally, the State Bank of Vietnam (SBV) is drafting a new Gold Management Policy, which will provide the base for a future Gold Monetization Scheme and its derivatives Gold Metal Loan or Gold Sovereign Bond.
“Vietnamese gold market players have an established relationship with many SBMA members that goes back to the last decade when physical trading was active in Vietnam; the hiatus for the past 4 years was due to SBV’s intervention to control inflation and adjust the balance of payment. The situation has improved, as SBV is now ready to reopen the market. The signing of MOU between us on closer cooperation is a testament to our long-term relationship and their value on our inputs in the further development of the gold market in Vietnam”, SBMA CEO Mr Albert Cheng said.
The first keynote address by Dr Paul Fisher (Chairman, London Bullion Market Association) focused on global risks – in particular for the Asian gold market. He cited the three main risks to be international regulatory changes, monetary and fiscal policy changes, and climate and sustainability, which he called “the biggest existential threat to global and Asian economies and markets”, and closed by saying, “Forget the politics – this is about business opportunities and risks. Precious metals have a role to play in both”.
In the second keynote, Mr Alistair Hewitt (Director, Market Intelligence Group, World Gold Council) discussed the changes that can be expected in the gold market in the next five to ten years and its implications for Asia Pacific countries. “Gold is a rapidly developing landscape … no one knows how things will pan out”, he said, but cited four trends he thinks will have the most impact: 1) increase in wealth in Asia Pacific, 2) changing consumer preferences, 3) exchange traded funds (ETFs) making gold more accessible, and 4) markets opening up and becoming more efficient.
The last keynote, by Mr Lianhui Ning (Vice General Manager, Shanghai International Gold Exchange), was about SGE’s efforts to create a “world-class comprehensive gold exchange”, and how it has been pursuing market-oriented improvements and internationalisation. In particular, he cited the cross-border cooperation that has been taking place under the framework of the Belt and Road Initiative, and the opportunities there has been to strengthen product innovation, establish overseas delivery routes, and better serve the diversified needs of international markets.
The conference also saw sessions that focused on regional market opportunities, technology, precious metals management policies, growing the precious metals supply chain, and building a harmonised and fungible kilobar market in Asia.
World Gold Council
Jutland Capital Management Ltd