Singapore a top choice for firms establishing treasury centres in Asia: DBS

SINGAPORE – Singapore has emerged as a top choice for multinational companies seeking to relocate their treasury centres, noted a new survey.

The country’s appeal is due to its status as a premier foreign exchange trading hub and its strategic location as a gateway between East and West, said DBS Bank, which polled 570 senior executives from companies in 15 markets across the Asia-Pacific, Europe and North America.

It found that around 40 per cent of those surveyed are considering relocating their regional treasury centres to or within Asia, with Singapore, Shanghai and Hong Kong being the top choices.

Their key considerations for selecting a location included access to global markets, a stable political environment and a conducive business environment. Another vital factor is working with a financial services partner with deep sector knowledge, a strong market presence and technology capabilities.

Hong Kong is highly rated for its tax and regulatory frameworks, financial resilience and talent pool, and Shanghai also excels in these areas, the report noted. But Singapore’s stability, established reputation and ease of doing business, especially evident during the Covid-19 restrictions, give it an edge.

Mr Lim Soon Chong, DBS’ group head of global transaction services, told The Straits Times on July 25 that connectivity, seamless access to capital markets, a strong financial system and a deep talent pool are some of the key requirements for regional treasury centres to thrive.

“In this regard, Singapore is an attractive destination given its stable political environment, robust financial infrastructure and position as the largest foreign exchange centre in the Asia-Pacific,” he said.

“These elements have helped Singapore cement its position as a bridge between Asia, Europe and North America.”

Mr Lim added that DBS has noted a growing number of multinationals eyeing emerging opportunities in South-east Asia, as well as the broader South Asia and the Asia-Pacific. This is driven by the regions’ expanding middle-income populations with a strong preference for e-commerce and on-demand services.

“In these conversations, Singapore frequently emerges as an ideal location for companies to manage their expansion across the region,” he said.

The report noted that multinationals based here said that business diversification is a top priority over the next two years.

The poll found that 80 per cent said they plan to diversify their sources of financing, while 75 per cent are focused on innovating products and services. This is in contrast with other survey respondents, who cited product and service innovation as their top priority for diversification.

Singapore’s businesses are choosing financing as a top priority due to the multiple funding and financing options available in the market, DBS said, adding that almost two-thirds of executives in Singapore believe that treasury and finance teams will be crucial to business success.

Companies here also said their treasury and finance teams are closely involved in a broad range of initiatives, including corporate strategy, innovation and product development, procurement and supply chain as well as sustainability-related activities.

These are in addition to the departments’ traditional responsibilities, such as cash and liquidity management, compliance and risk management.

DBS also noted that 75 per cent of the executives surveyed said expansion in Asia is a strategic priority, while 61 per cent said they are looking to do so specifically within the Asia-Pacific.

Mr Lim noted that Asia continues to be the “epicentre of growth”, with businesses seeking new consumer markets and manufacturing capacities in the region’s emerging economies.

“To capitalise on these opportunities, companies are increasingly operating across borders, embracing e-commerce and delivering on-demand services to keep up with changing consumer preferences,” he said.