The FINANCIAL — Five ASEAN exchanges, namely Bursa Malaysia Berhad, Indonesia Stock Exchange, Philippine Stock Exchange, Singapore Exchange and The Stock Exchange of Thailand, on February 23 signed a Memorandum of Understanding (MOU) to form an ASEAN electronic trading link to enhance the competitiveness of their capital markets.
This e-trading link, through one single access point, allows intra-ASEAN cross-border trading and will attract more international funds into ASEAN.
“Enhancing competitiveness and promoting innovation must be two main priorities of the ASEAN exchanges. Working together as one regional market place, we open up unlimited investment opportunities. The cooperative spirit, which is central to the MOU we are signing today, is the key to success in global competition. The benefit of this MOU will be mutual, a win-win solution for all, including our listed companies, investors and market participants,” said Mr. Pakorn Malakul Na Ayudhya, Chairman of The Stock Exchange of Thailand.
This initiative is clearly another important milestone for the ASEAN nations. Mr. Korn Chatikavanij, Thailand’s Finance Minister said, “This project will strengthen our regional financial stability by deepening regional capital markets and facilitating progressive liberalisation of our financial sector. A stronger, integrated and more competitive ASEAN is necessary to respond to the changing global landscape. Offering a single platform is a starting point to achieve our 2015 vision of a more integrated ASEAN capital market with harmonised rules, regulations and practices.”
Bursa Malaysia’s CEO, Dato’ Yusli Mohamed Yusoff pointed out, “Forging closer co-operation among regional exchanges is crucial for us to remain globally relevant. As a progressive exchange, Bursa Malaysia is supportive of this initiative which will encourage greater intra-ASEAN trading. An integrated ASEAN capital market will raise the profile of this region’s securities to the global investment community.”
“Our consideration for the development of this linkage is based on the following principles: maintain liquidity in home markets, gain support from local brokers by avoiding disintermediation, and comply with home regulations. Our goal is to develop a strong and healthy ASEAN capital market based on a prudential risk management framework,” Indonesia Stock Exchange’s President Director, Mr. Erry Firmansyah added.
The Philippine Stock Exchange’s President and CEO, Mr. Francisco Edralin Lim described the new service offering to regional and international investors. He said, “This linkage provides exciting opportunities for our market participants to expand their investment horizon to ASEAN markets. Any Filipino investor can now buy Indonesian, Malaysian, Thai and Singaporean securities with the same ease as buying Philippine securities and vice-versa. This linkage can also provide opportunities for investors outside ASEAN to easily trade ASEAN securities. This will position ASEAN as an asset class and a viable investment destination.”
Mr. Hsieh Fu Hua, CEO of Singapore Exchange said, “This linkage paves the way for ASEAN depositories to custodise ASEAN securities for their account holders. The ASEAN exchanges will work towards establishing their clearing houses as central counterparties to facilitate clearing and settlement of cross-border trades. Brokers will benefit from building on their relationships with their home clearing houses and need not take on foreign counterparty risks.”
“Apart from the exchanges signing the MOU today, this linkage is open to other ASEAN exchanges. We are now in the process of evaluating a technology platform and scheduling the implementation among the exchanges. The e-trading link is expected to go live next year. As secretariat of this initiative, The Stock Exchange of Thailand would like to thank the ASEAN exchanges for their effort and commitment. Signing this vital MOU today opens a new chapter in the collaboration towards an integrated, harmonised and attractive ASEAN marketplace”, Ms. Patareeya Benjapolchai, President of The Stock Exchange of Thailand elaborated.
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