BURSA, S’PORE EXCHANGE TO LINK UP
It will lower trading costs, promote cross-border investments, says Najib
MALAYSIA and Singapore will establish a new trading link between their respective stock exchanges by the end of the year that will lower trading costs and encourage cross-border investments.
Prime Minister Datuk Seri Najib Razak, in announcing the Malaysia-Singapore Connect initiative, said it would enable stock market investors from each country to trade in the other seamlessly.
Bursa Malaysia and the Singapore Exchange (SGX) have a combined market capitalisation of over US$1.2 trillion (RM4.8 trillion), and over 1,600 public-listed companies, he said in his keynote address at the 2018 World Capital Markets Symposium (WCMS).
Addressing an audience of global thought leaders, industry experts and capital market decision makers, Najib said he and Singaporean Prime Minister Lee Hsien Loong had agreed that it was the right time to establish the link between both countries’ stock exchanges.
“We have agreed that both markets have reached a sufficient level of sophistication and degree of maturity for us to establish a market corridor connecting Malaysia and Singapore, with a trading link between our respective exchanges, to spur further mutual benefits and harness the economic potential of our two nations,” Najib said.
Securities Commission chairman Tan Sri Ranjit Ajit Singh said regulators were ironing out the details and challenges towards the establishment of this link.
“There are a number of things that we need to iron out, such as costs associated with the transactions as well as the need to address post-trade settlement issues.
“That said, we are optimistic that we will be able to finalise and launch the link by the end of this year,” he said at a media briefing later.
Ranjit added that the MalaysiaSingapore Connect initiative could be expanded to include the rest of the stock exchanges in Asean.
“The establishment of this trading link is an important step towards encouraging Asean investors to invest in Asean.
“The ease of accessibility for investors will contribute towards greater vibrancy in our markets.
“Once operationalised, this pilot initiative can form the basis for future connectivity among Asean markets,” he added.
The initiative was immediately welcomed by both stock exchanges.
Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan said Malaysia-Singapore Connect would strengthen the local bourse’s proposition as Asean’s multinational marketplace with global connectivity.
SGX chief executive officer Loh Boon Chye said the trading link would galvanise wider interest in listed companies and boost trading activity in both markets.
“We will utilise technology to implement an end-to-end solution that delivers a better and more efficient experience for market participants.”
At the WCMS 2018, Najib and Ranjit also launched the Institute of Capital Market Research Malaysia (ICMR), which aims to share knowledge and ideas through a multi-stakeholder approach with policy makers, regulators, the academia and industry.
The strategic research partners for ICMR include The Wharton School, University of Pennsylvania, the Nomura Institute of Capital Markets Research as well as the Jeffrey Sachs Centre on Sustainable Development.