As part of its plan to become the Asia-Pacific's carbon hub, Singapore may start trading emissions on a new exchange, Bloomberg reported yesterday.

The Financial Technologies Group plans to establish the Singapore Mercantile Exchange (SMX) by the end of the year, said Senior Minister of State for Trade and Industry S. Iswaran yesterday.

He said that SMX will offer an electronic trading platform for futures and options trading on a diversified range of commodities, including energy, metals, agricultural commodities, currencies, commodity indices and carbon credits.

Singapore plans to become a carbon-trading centre by providing incentives to developers of carbon projects, said Bloomberg. The country - Asia's bigges oil-trading centre - is offering tax breaks and setting up a clean-energy industrial park to boost the carbon-trading business, said Mr Iswaran.

The Monetary Authority of Singapore's incentive schemes for commodity derivatives trading and fund management were expanded earlier this year.

"Where previously these were limited to tangible commodities, such as oil, metals and agri-commodities, these incentive schemes have since been enhanced to include emissions derivatives," Mr Iswaran said at the launch of the Carbon Asia Forum at Raffles City Convention Centre.

Sweden-based Tricorona the second-largest buyer of emission allowances, set up its global trading hub in Singapore
this year, he said.

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