Investing in Philippines: ASEAN stock exchange

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Sunday, August 1, 2010

ASEAN stock exchange



I got some rumors from my friends in a stock forum regarding a unification of bourses under one board. As I searched the Internet I got this news from The Nation Business posted since last year:


5 Asean stock markets set up cross-border trading


Investors will be able to buy and sell stocks in five Asean countries - Malaysia, Indonesia, Philippines, Singapore and Thailand - from next year via a common board. 

The Aseanlinkage board will be established for intraAsean crossborder trading. The Vietnamese stock market, which was earlier scheduled to be part of the group, is not ready to join next year.


Yesterday, representatives from the five regional exchanges - Bursa Malaysia, the Indonesia Stock Exchange, the Philippine Stock Exchange, the Singapore Exchange and the Stock Exchange of Thailand (SET) - signed a memorandum of understanding (MoU) to form an Asean electronictrading link to enhance the competitiveness of their capital markets. 

This etrading link, through a single access point, is expected to attract more international funds into Asean. SET president Patareeya Benjapholchai said the five markets would open for trading in the fourth quarter of 2010 via a "bulletin board".
She added that the Asean-linkage bulletin board would be established within the fourth quarter of this year.
Each country will list its 30 top stocks to trade on the Aseanlinkage board. Thus, there will be a total of about 150 listed companies from the five countries listed, representing 60 per cent of total market capitalisation of the regional stock markets.

From now on, each stock market will jointly set up a network system including IT, revenuesharing system, and interbrokerage transactions among the countries. Patareeya added that Vietnam said it was not ready yet to sign the MoU and expected to join the regional trading board later.

Finance Minister Korn Chatikavanij said a stronger, integrated and more competitive Asean was necessary to respond to the changing global landscape. Offering a single platform is a starting point to achieve the 2015 vision of a more integrated Asean capital market with harmonised rules, regulations and practices, he said.
Bursa Malaysia CEO Yusli Mohamed Yusoff said: "Forging closer cooperation 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 intraAsean trading."

Indonesia Stock Exchange president and director Erry Firmansyah said: "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." 

Philippine Stock Exchange president and CEO Francisco Edralin Lim said: "Any Filipino investor can now buy Indonesian, Malaysian, Thai and Singaporean securities with the same ease as buying Philippine securities, and vice versa."

Hsieh Fu Hua, CEO of the Singapore Exchange, said: "This linkage paves the way for Asean depositories to customise 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 crossborder trades. Brokers will benefit from building on their relationships with their home clearing houses, and need not take on foreign counterparty risks."

Meanwhile, the Singapore Exchange and the SET yesterday renewed the MoU to continue the cooperation between the two exchanges towards the development of both capital markets.
The MoU aims to foster closer collaboration in securities trading, promotional activities of their market participants as well as information sharing regarding the operations and regulatory framework of their respective securities and derivatives markets. The two exchanges will also seek possible cooperation on crosstrading of securities.

The two exchanges first signed the MoU for general cooperation on August 27, 2003. The memorandum has been renewed for a further five years, until 2013.

For more reading visit: Invest Philippines 
                                     The Nation Business
                                     Asian Development Bank 

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