BANGKOK – Singapore and Malaysia plan to establish a link between their stock markets – the Singapore Exchange and Bursa Malaysia – by the end of this year, officials said on Tuesday.
The agreement is part of efforts to deepen financial connectivity across markets in ASEAN – the Association of Southeast Asian Nations – which includes both Singapore and Malaysia.
“The ease of accessibility for investors will contribute towards greater vibrancy in our markets. Once operationalized, this pilot initiative can form the basis for future connectivity among ASEAN markets,” Ranjit Ajit Singh, chairman of Securities Commission (SC) Malaysia and the ASEAN Capital Markets Forum, said in a statement.
The Monetary Authority of Singapore (MAS) and SC Malaysia will set up cross-border supervisory and enforcement arrangements for the link, which is aimed to help investors trade on each other’s stock markets and reduce the cost.
Singh also said that the link will help attract ASEAN investors to invest in ASEAN, while Lee Boon Ngiap, the assistant managing director of MAS, said the move will improve the liquidity of both stock markets.
Announcing the link at an investor conference in Kuala Lumpur, Malaysian Prime Minister Najib Razak said he and his Singapore counterpart, Lee Hsien Loong, had agreed that both markets had reached a sufficient level of sophistication and maturity for establishing a market corridor.
Razak said that the project will offer easier and uninterrupted access to investors in both markets, with a capitalization of more than $1.2 trillion dollars and 1,600 companies listed, the Bernama news agency reported.