The Monetary Authority of Singapore (MAS) has asked the Malaysian regulator to clarify its position on the planned share-trading link after the announcement from Prime Minister Mahathir Mohamad yesterday that the project is being studied.
MAS and Securities Commission Malaysia had said in February that they would work together to set up a stock market trading link by the end of the year.
This would allow investors from both countries to trade on Bursa Malaysia and the Singapore Exchange (SGX) - a combined market of 1,600 public-listed companies worth more than US$1.2 trillion (S$1.6 trillion).
The SGX also added yesterday that it will await further clarity on the matter.
Securities Investors Association (Singapore) president David Gerald said yesterday: "Investors from both sides of the Causeway stand to benefit by the arrangement and it is, therefore, difficult to understand on an economic basis why the arrangement should be scrapped.
"Nevertheless, if it is for financial reasons Malaysia wishes to review it, then we will wait and see what comes out of their decision."
Mr Robson Lee, a Singapore-based lawyer at Gibson, Dunn & Crutcher, said: "I hope the new Malaysian government will give serious consideration to the in-tangible longer-term benefits for the Malaysian market co-existing within a more integrated regional market."