SGX, Shenzhen exchange to link ETF markets in Singapore and China

Local bourse operator Singapore Exchange (SGX) announced on Tuesday that it has signed a memorandum of understanding 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 came as Singapore and China marked more than three decades of diplomatic ties at the 17th Joint Council for Bilateral Cooperation yesterday, co-chaired by Deputy Prime Minister Heng Swee Keat and Chinese Vice-Premier Han Zheng.

SGX chief executive 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," Mr Loh said.

As at the end of last month, Singapore-listed ETFs crossed $12 billion in assets, up by close to 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 $9.36 yesterday, down two cents or 0.2 per cent.

THE BUSINESS TIMES

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A version of this article appeared in the print edition of The Straits Times on December 30, 2021, with the headline SGX, Shenzhen exchange to link ETF markets in Singapore and China. Subscribe