Singapore, Malaysia To Build Stock Exchange Bridge

Josh O'Neill

7 February 2018

Singapore and Malaysia will establish a stock market trading link by the end of this year, the city-state’s regulator and de facto central bank announced yesterday, a sign of exchange link-ups taking shape in Asia.

The will link up Bursa Malaysia and the Singapore Exchange, allowing investors to trade and settle shares listed in both markets “in a more convenient and cost-efficient manner,” the MAS said in a statement.

Lee Boon Ngiap, assistant managing director of the MAS, said: “The trading link will help lower trading costs for investors and encourage greater cross-border investments in the stocks listed on each other’s exchanges. This will improve the liquidity of both our stock markets.” He added that he hoped the initiative would eventually include all stock exchanges based in the Association of Southeast Asian Nations (ASEAN).

In recent years, the Hong Kong stock market and those in Shanghai and Shenzhen have linked up, a sign of how China is seeking to open its capital markets to international finance. The moves also throw a competitive challenge at rival Asian hubs such as in Singapore.

The MAS and SCM will set up cross-border supervisory and enforcement arrangements, and work with the two exchanges to operationalise the link, the regulators said.

Tan Sri Dato’ Seri Ranjit Ajit Singh, SCM’s Malaysia chairman, said: “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.”