SGX says trading link will help market Southeast Asia

Written by Writer on Tuesday, November 11th, 2008

SGX says trading link will help market Southeast Asia

Posted: 10 November 2008

SINGAPORE: Plans to implement electronic trading links across Southeast Asia’s stock markets will help market the region as an asset class, the head of the Singapore Exchange said on Monday.

The joint trading board would feature 30 stocks from each stock market, said Hsieh Fu Hua, chief executive of the Singapore Exchange (SGX).

“The objective is to profile the best stocks from each exchange and market ASEAN (the Association of Southeast Asian Nations) as an asset class,” he told an industry gathering.

Investors in each market would be able to see the aggregated trading board and trade through their own local brokers, Hsieh said.

“The rules of each market will continue to apply on its own slate of stocks. This aims to retain liquidity in the home market of the stocks,” he added.

Hsieh added that the SGX had proposed that the trading board be accompanied by clearing and depository links, which will enable better management of risks and settlement failures.

“The creation of multilateral clearing links is a natural precursor to the integration of trading platforms, paving the way for a more liquid, lower risk and cost-efficient integrated Asian market,” he said.

Last month, the Philippine Stock Exchange announced that six ASEAN markets were planning the link to allow investors to buy or sell ASEAN-listed securities. A start date has yet to be agreed.

“The urgency of developing linkages among ASEAN exchanges arises mainly from global pressures that could make small exchanges irrelevant in the global financial market arena,” the exchange said at the time.

The new trading board will link exchanges in the Philippines, Malaysia, Vietnam, Indonesia, Singapore and Thailand - all members of the ASEAN bloc.

Other members of the ten-nation ASEAN are Brunei, Cambodia, Laos and Myanmar. - AFP/so