"It is going to be a marathon rather than a sprint," said Kuan Weng Chi of Thomson Global Markets. So far the steps the Singapore government has taken had been "very prudent" but in the right direction, he added.

In August, deputy prime minister Lee Hsien Loong, who is also head of the Monetary Authority of Singapore (MAS), said Singapore would implement a series of measures to become a serious contender in Asia's fixed income securities market.

They included regular issue of government bonds to create a benchmark yield curve, greater encouragement of issues by state-owned groups, relaxing rules to allow foreign institutions to issue Singapore dollar-denominated bonds and allowing foreign non-residents to engage in re-purchase agreements in Singapore government bonds.

"Singapore has theopportunity to promote the origination and trading of fixed income securities and to develop into a regional hub for business," Lee said then.

"The government will take steps to help seed a vibrant and liquid bond market and encourage major international players in fixed income securities to site in Singapore."

Lee said he envisaged crisis-hit Asia having to raise large amounts of capital in the coming years to re-capitalise banks and companies and eventually for infrastructure building.

The triple-A rated issue by the World Bank's IFC, lead-managed by Citicorp Investment Bank (Singapore) Ltd, is the first Singapore dollar-denominated issue by a foreign entity.

MAS managing director Koh Yong Guan said after it was first announced there would be more such supranational issues in pursuit of Singapore's ambition to become "the centre for origination, trading and listing of foreign securities for the Asian region."

Apart from the IFC issue, another benchmark for the Singapore bond market was theissuance in July of the first 10-year government bond issue worth S$1.5 billion.

"Quite clearly the government is going to the market not necessarily because it needs the funds but to create a yield curve against which companies and financial institutions can efficiently price their bonds," said one fixed income securities head with a European bank.

An MAS spokesman said that the central bank was also studying a proposal from Singapore Government Securities (SGS) primary dealers to open the government bond market to brokers.

"The SGS primary dealers propose to use money brokers ExcoAP Singapore and Prebon Yamane (Singapore) in their SGS transactions and have consulted MAS on this arrangement," he said.

Lee also said in August that Singapore's statutory boards, responsible for public housing and infrastructure projects such as the mass rapid transit system, would also issue bonds to pay for their projects rather than rely on government funding.

Singapore's Public Utilities Board (PUB) said later inAugust it might issue bonds to finance Singapore's first desalination plant, projected to cost S$900 million.

Industry sources said all this would add breadth to a growing capital market and revive a Singapore government bond market typified by a lack of liquidity and the dominance of primary dealers.

"Compared to a year or a year-and-a-half ago, liquidity has definitely picked up," helped by a flight of capital to good quality investments, said Thomson Global Market's Kuan.