Bank of China-mnl, PSE ink financial services deal
OFFICIALS of the Philippine Stock Exchange Inc. and Bank of China (Hong Kong) Limited-manila Branch have signed last Wednesday a memorandum of understanding to provide financial services between the Philippines and China. The agreement is in support of bilateral investment and trade through capital market linkages between the two countries, the PSE said in a statement.
The agreement covers, for one, the creation of a working group from both parties to explore areas of cooperation and exchange of information on settlement infrastructure. The MOU also prompts the creation of a group for account opening, foreign exchange and cross-border settlement. PSE President and CEO Ramon S. Monzon welcomed “this strategic partnership.
“We look forward to working with Bank of China-manila,” Monzon was quoted in the statement as saying. “This collaboration can potentially fast track the stock connect initiative between the PSE and the three stock exchanges in China.”
“The stock connect program is vital to PSE since this will open our stock market to more foreign investors and enhance liquidity in the stock market,” he said.
Bank of China-manila will be providing the financial infrastructure to support the settlement of trading between the Philippine and Chinese exchanges, as well as provide direct peso-renmimbi (RMB) conversion required for the settlements.
As the designated Rmbclearing bank in the Philippines, the lender is in a unique position to make trading between stock exchanges easier, cheaper and more efficient.
“Our mission has not changed in terms of acting as a bridge between the Philippines and China to facilitate bilateral trade and investment. The financial services we aim to provide to PSE, its brokers and other stakeholders will add more color to this mission,” Deng Jun, country head of Bank of China Manila said.
“We look forward to working with the PSE and other financial institutions to explore further cooperation of both countries through bonds issuance, stock exchange, and capital market trading, which may be another important step in the currency diversification of the local capital market.”
Aside from initiatives related to the stock connect, the deal will also cover other areas for cooperation such as the provision for banking services by Bank of China for the PSE and its stakeholders specifically listed companies and trading participants.
The agreement was signed with China State Councilor and Foreign Minister Wang Yi, Foreign Affairs Secretary Enrique A. Manalo and Chinese Ambassador to the Philippines Huang Xilian as witnesses.