Online trading link of 4 ASEAN stock markets

James Ryan Jonas

I read on the Philippine Stock Exchange (PSE) website today that there is a current proposal among four (4) Southeast Asian countries to interconnect their stock markets.

According to the press release, the trading link which is expected to electronically interconnect the stock markets of the Philippines, Malaysia, Thailand and Singapore will most probably go live by the end of 2011.

The press release goes:

Four ASEAN Exchanges, namely Bursa Malaysia (BM), the Philippine Stock Exchange, Inc. (PSE), Singapore Exchange (SGX) and the Stock Exchange of Thailand (SET) working together with NYSE Technologies, today said the design study of the technology framework for the ASEAN Trading Link has been completed.

The ASEAN Trading Link aims to electronically interconnect the participating markets and facilitate cross border order trading seamlessly. Depending on the selected infrastructure vendor, it is expected that the link will go live toward the end of 2011.

I’m not exactly sure about the details of the proposal and whether this means we can start trading stocks in other ASEAN exchanges easily, but this surely is good news. Linking the four stock markets could mean new investment options for Filipino investors and, at the same time, more foreign investors to the Philippine stock market which would drive growth.

Looking forward to see how this plan will be implemented in the coming months.

About the Philippine Stock Exchange (PSE)

The Philippine Stock Exchange (PSE) is one of the longest operating stock exchanges in Southeast Asia since its inception in 1927. It was the product of a merger in 1992 between the Manila Stock Exchange and the Makati Stock Exchange. The PSE currently maintains two trading floors, one in Makati City (Tower One along Ayala Avenue) and another in Pasig City (PSE Tektite Towers). As of December 2010, there are 253 listed firms with a combined market capitalization of US$202 billion. It has 133 active trading participants.

About Bursa Malaysia (BM)

Bursa Malaysia (BM) is an exchange holding company approved under Section 15 of the Capital Markets and Services Act 2007. It operates a fully-integrated exchange, offering the complete range of exchange-related services including trading, clearing, settlement and depository services. It has around 1,000 listed companies with market capitalization reaching RM1.27 trillion (US$ 417 billion) at the end of December 2010.

About the Stock Exchange of Thailand (SET)

The Stock Exchange of Thailand (SET) commenced its trading operation in 1975. In additional to equity products, SET offers investors an opportunity to buy and sell bonds over the Bond Electronic Exchange (BEX), as well as derivatives, which are traded on the Thailand Futures Exchanges (TFEX). As of December 2009, the market capitalization stood at THB 5,912 billion (US$ 177 billion), with 663 securities listed.

About Singapore Exchange (SGX)

Singapore Exchange (SGX) is among the world’s largest exchanges and Asia’s second largest listed exchange. Its extensive suite of securities, derivatives and commodities products makes it Asia’s most international exchange. It has the region’s longest trading hours, operating full day in the next months from 9 am to 5 pm. As of 31 Jan 2010, there were 774 listed companies on the Singapore Exchange with a market capitalisation of SGD$650 billion (US$ 510 billion).

Sources: Websites of PSE, BM, SET, and SGX

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.