Singapore seen as regional hub for new platinum products

Investors in Singapore will soon be able to sink their money into a wider range of assets linked to the precious metal that is rarer and pricier than gold - platinum.

The World Platinum Investment Council (WPIC), the leading industry body, is setting up shop here.

It has joined the Singapore Bullion Market Association (SBMA) as it moves to stimulate investor demand for physical platinum and grow platinum investment opportunities available in Asia.

This means it will be able to roll out both retail and institutional platinum investment products, such as bars and coins, and exchange-traded funds, said Mr Marcus Grubb, WPIC director of market development.

He said Singapore offers "an abundance of market-development opportunities" for such products as a leading global wealth-management market, with US$500 billion (S$710 billion) in assets.

"It is also a growing hub for precious metals investment and the industry value chain with strong government backing for the precious metals business."

Platinum lost 26 per cent in value in the past year, hurt by the strengthening greenback, a slowdown in China and the Volkswagen emissions scandal, which dented prospects for demand. Platinum is widely used in diesel cars to cut emissions. But Mr Grubb is confident that platinum supply-demand fundamentals "remain robust", driven by the automotive and jewellery industries, he told The Straits Times.

"Platinum is a good investment asset as it has some of the diversifying properties of gold, improving risk-adjusted returns of portfolios and better performance than gold in an economic recovery."

SBMA chief executive Albert Cheng noted that the WPIC's membership comes at "an interesting time in the market's development".

"Since the removal of the goods and services tax in 2012, there has been a real step-change in Singapore's prominence as a major hub for precious metals trading and investment, a position we are working hard to consolidate," he said.

Members of the SBMA, formed in 1993 to promote Singapore as a precious metals hub, include ICBC Standard Bank, JP Morgan and UOB Bullion & Futures.

Mr Satvinder Singh, assistant chief executive of International Enterprise Singapore, said that the partnership will "further strengthen Singapore's position as Asia's precious metals trading hub and the continued development of platinum in the region".

This article was first published on Jan 30, 2016.
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