Clearstream strengthens commitment to Asia with settlement link to the Philippines
23 October 2012
Clearstream has launched a new settlement link to provide institutional investors access to Philippine securities. The company will offer settlement and custody services for all asset classes denominated in the Philippine Peso, i.e. for listed equities, government bonds, corporate bonds, warrants, treasury bills and depository receipts. Clearstream customers will have the opportunity to develop post-trade solutions for the Philippine market using Clearstream as their single point of access. Clearstream is the only international central securities depository (ICSD) with a fully operational settlement link to the Philippines. Standard Chartered Bank, Philippines, is Clearstream’s local partner and will act as sub-custodian.
Mark Gem, Member of the Executive Board of Clearstream and Head of Business Management, said: “There is an ever growing appetite amongst international investors for investments in Asia, and the Philippines has moved into the spotlight. We have been supporting the issuance of international securities denominated in Philippine Peso for a number of years and we are now enhancing our service with the domestic security capability together with market specialist Standard Chartered Bank as local agent. We will continue to facilitate access to the Asian markets and connect Asian issuers with the global investor base.”
Simon Cleary, Global Head of Custodian Banks, Standard Chartered, said: “We are delighted to expand on the range of services we currently offer to Clearstream, and to support the extension of international access channels to the Philippines market. This appointment demonstrates our ability to deliver flexible solutions in developing and emerging markets, which was key to providing the right solution for Clearstream. We look forward to a strong partnership.”
According to the International Monetary Fund (IMF), the Philippine economy grew by a record 7.3 percent in 2010. Economic growth slowed down to 3.7 percent in 2011, but a growth rate above 2011 level is expected in 2012 and beyond. The country’s stock market continues to perform significantly well: the Philippine Stock Exchange Index (PSEi) recorded an all-time high on 3 October 2012 surpassing a number of highs already set during 2012. The Philippine stock market is among the strongest performing in Asia. The country is currently aiming for an investment grade rating.
Clearstream has a long-standing presence in Asia: The company opened its first office in the region in Hong Kong in 1990. Clearstream has also representative offices in Dubai (since 1995) and Tokyo (since 2007) and a branch in Singapore (since 2009) – the company’s operational hub for the region. Clearstream offers access to the following markets in Asia: China (B Shares), Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand. 20 percent of Clearstream’s ICSD revenues are currently coming from Asia. The company has a longs-standing business relationship with the Philippines and has customers in the region for more than two decades.
Clearstream has the largest settlement network amongst international central securities depositories (ICSDs). The company has settlement links to 53 domestic markets around the globe: 33 in Europe, 6 in the Americas, 11 in the Asia Pacific region and 3 in Middle-East and Africa. It is the widest network of any ICSD and enables counterparties in local markets to efficiently settle eligible securities through Clearstream’s operational hubs, i.e. in Singapore.
International central securities depositories like Clearstream were set up in the 1970s to provide settlement and custody services for Eurobonds. In recent years they have established settlement links to dozens of local markets and settlements of trades in domestic securities – primarily European government bonds – account today for a significant portion of the ICSD revenues. Settlement links enable ICSD participants to settle trades with other participants in the same ICSD, with participants in the other ICSDs, or with local market participants. Clearstream has evolved from being a pure Eurobond house to holding equity, funds, structured products and commodities.
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