SGX, Shenzhen exchange to link ETF markets in Singapore and China
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This comes as Singapore and China are set to mark more than three decades of diplomatic ties.
ST PHOTO: KUA CHEE SIONG
Yong Jun Yuan
SINGAPORE (THE BUSINESS TIMES) - Local bourse operator Singapore Exchange announced on Tuesday (Dec 28) that it had signed a memorandum of understanding (MOU) with its Chinese counterpart, the Shenzhen Stock Exchange (SZSE), to establish an exchange-traded fund (ETF) link.
Under the MOU, SGX and SZSE will look to list feeder ETFs which link locally listed ETFs to ones listed on the other exchange, offering investors a wider range of investment options and allowing domestic ETF issuers to tap cross-border capital flows.
This comes as Singapore and China are set to mark more than three decades of diplomatic ties at the upcoming 17th Joint Council for Bilateral Cooperation on Wednesday, co-chaired by Chinese Vice-Premier Han Zheng and Deputy Prime Minister Heng Swee Keat.
SGX chief executive officer Loh Boon Chye said that the strong demand for ETFs in Asia underscores the region's growing role as a global ETF hub.
"We look forward to working closely with onshore exchanges in strengthening the ETF markets in Singapore and China, and to more regional collaborations," he said.
As at end-November, Singapore-listed ETFs crossed $12 billion in assets, up 50 per cent from the same period a year ago. Currently, the SGX lists 35 ETFs, while the SZSE lists 212 ETFs.
SGX shares closed at $9.38, up eight cents or 0.9 per cent on Tuesday before the announcement was made.
