Singapore and Malaysia to set up stock market trading link

SINGAPORE — Singapore and Malaysia will set up a stock market trading link by the end of this year, to allow investors to trade and settle shares listed on each other’s exchanges.

The establishment of the trading link was announced by Malaysian Prime Minister Najib Razak on Tuesday (Feb 6).

“A regulatory arrangement will be worked on by the countries’ relevant regulatory authorities, to pave the way for the establishment of this trading link,” he said in a speech to investors and business leaders at the World Capital Markets Symposium in Kuala Lumpur.

The link will provide investors in both countries easier and seamless access to each other's markets with a combined market capitalisation of more than US$1.2 trillion (S$1.58 trillion) and 1,600 public listed companies, he added.

In a joint press statement on Tuesday, the Monetary Authority of Singapore (MAS) and the Securities Commission (SC) Malaysia said: “The trading link (which will be established between Bursa Malaysia and Singapore Exchange) will allow investors to trade and settle shares listed on each other’s stock market in a more convenient and cost efficient manner.”

The bilateral initiative is an outcome of ongoing efforts by the Association of South-east Asian Nations (Asean) Capital Markets Forum (ACMF). The forum aims to deepen financial connectivity across the region's capital markets.

The joint statement added that the link between the two country's exchanges will extend beyond trading to cover post-trade arrangements like the clearing and settlement of the stocks traded.

“In relation to this strategic initiative, MAS and SC will set up cross-border supervisory and enforcement arrangements, and work together with the two exchanges to operationalise the link,” the statement added.

Mr Lee Boon Ngiap, MAS’ Assistant Managing Director stressed that 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. He added that this will improve the liquidity of both stock markets.

“I hope this initiative will in time expand to include the rest of the stock exchanges in Asean,” he added. AGENCIES