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Tuesday, Oct 31, 2006

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Venture funds: Singapore `looking at India'

M. Ramesh

Singapore is a capital surplus region

Singapore , Oct. 30

The Singapore Minister for Trade and Industry, Mr Lim Hng Kiang, on Monday said that the island nation was "looking at India" for opportunities for the Singapore-based venture funds.

Capital surplus

"Singapore is a capital surplus region but the deployment of the capital is not so sophisticated," Mr Kiang said at a press conference here.

"We do have beginnings of a venture capital industry here, but candidly I would say that we have not been very successful," he said, noting that many funds preferred to be in Hong Kong or China.

The Chinese market had "so many start-ups, there are so many new companies being created," Mr Kiang said, adding that enterprise development in the Singapore region, including Indonesia and Malaysia, was not as good as in China.

Nor did Singapore has a "Silicon valley-type" of venture capital environment.

Venture capital environment

The Singapore government was briefly faced with a question: Whether to let "nature take its call" or understand venture funding and do something about it. The government chose the latter.

One of the steps the government took was to encourage "fund of funds," or funds that would finance other venture funds. Today, Singapore has five such funds.

Now the Singapore government would like to encourage these funds to finance startups in India too.


Asked to review the India-Singapore Comprehensive Economic Co-operation Agreement, Mr Kiang said that after the CECA, considerable progress had been made in trade and investment. Two-way trade grew 41 per cent in 2005, to Rs 48,555 crore and was projected to grow similarly in the current year, the Minister said.

On other issues such as movement of natural persons, Mr Kiang said that the Singapore government had asked a groups of professionals in the country to evolve criteria for Indian professionals to work in Singapore.

"Singapore welcomes professionals from India to come here and work," he said.

The Minister said he was confident that the issue of giving full-fledged banking licences reciprocally to three banks from both countries would be resolved soon.

The central banks of both countries feel that "there are some prudential and regulatory considerations that the banks must satisfy," he said. He noted that there were over 2,000 Indian companies in Singapore and Indian banks would be happy to service them.

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