ASEAN KEY DESTINATIONS
Potential in ASEAN Trading Link
SINGAPORE Exchange Ltd’s chief executive said on Wednesday he is looking to emulate the much-heralded Stock Connect link between Hong Kong and Shanghai by formally linking together Southeast Asian bourses.
With a plan already in the works to form a stock trading link with Taiwan later this year, Magnus Bocker told Reuters that establishing direct connections between exchanges has replaced mergers and acquisitions as the industry’s main growth strategy, particularly in Asia.
He wants a fledgling link between stock broking houses in Singapore, Malaysia and Thailand, known as the Association of Southeast Asian Nations (ASEAN) Trading Link, to evolve into a formal connection between the region’s exchanges.
“I’m optimistic that out of that ASEAN Trading Link, with what’s going on in linking up markets, that hopefully within a couple of years we can link ASEAN closer together between the exchanges, the clearing houses,” he said.
The November launch of the landmark Stock Connect trading platform between Hong Kong and Shanghai has, despite some technical problems, been hailed as a major step forward in the opening up of China’s capital markets.
The launch has spurred other exchanges including Taiwan and Shenzhen to look at such connections, hoping to make cross-border share trading easier and improve market liquidity.
Developing such a link in Southeast Asia will be tough though.
ASEAN is notorious for its slow progress on joint initiatives, and the current trading link between broking houses that was established in 2012 has so far seen low volumes.
“We are not there yet but with the other links coming, I think it will enable us to do it in an ASEAN context,” Bocker said.
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