March 17, 2008, 6.34 pm (Singapore time)

S'pore hedge funds have little sub-prime risk: MAS

SINGAPORE - Singapore-based hedge funds have little exposure to risky sub-prime assets and most have not had difficulty responding to the credit crunch, the city-state's central bank said on Monday.

'Based on our latest review in end 2007, hedge fund managers in Singapore have minimal exposures to the sub-prime market,' the Monetary Authority of Singapore (MAS) said in response to a Reuters query.

'Most players have not experienced problems, such as inability to meet redemption requests or margin calls, or problems with valuation, arising from the recent credit crunch,' the central bank added.

Singapore has been promoting the hedge fund industry and currently serves as the base for more than 200 funds.

MAS also said that the republic's banks have enough cash, and that the lenders are expected to be prudent and manage risks.

'The current liquidity positions of our banks are sound,' a MAS spokesperson said.

Western banks such as Bear Stearns have been hit by a lack of cash due to credit turmoil. -- REUTERS