There was little fanfare five months ago when the Hong Kong-Shanghai stock connect was launched, allowing direct trading of shares between both bourses.
This was despite the important fact that it marked the first time mainland Chinese investors could remit money to buy stocks outside China, which imposes strict capital control over the flow of its currency outside its borders.
But this changed dramatically in the past two weeks. A surge in buying interest from mainland Chinese investors boosted stock trading turnover in Hong Kong to record-high levels and pushed up the widely watched Hang Seng Index by as much as 10 per cent.
One big beneficiary of the sudden bull run is the Hong Kong Exchanges & Clearing, whose market value has shot up by 51 per cent in the past two weeks to a staggering HK$335 billion (S$59 billion) - 6.4 times the Singapore Exchange's (SGX's) market cap of S$9.2 billion - making it the most valuable bourse operator in the world.
Given the roaring success of the Hong Kong-Shanghai connect, it is not surprising that there are high hopes in Singapore that the city-state will be the next stop in China's outreach to the world's equity markets.
The exuberance was sufficient to propel SGX's share price up by almost 10 per cent in the past week.
But in a statement last night, SGX said that it is not currently in the process of establishing a link along the lines of the Hong Kong-Shanghai connect.
Even so, this may not quell market talk on the subject.
Last week, Macquarie Securities analyst Thomas Stoegner boldly wrote that a Singapore-China stock connect could be a possibility in the next 12 to 18 months.
The excellent relationship between Singapore and China was one reason for his exuberance.
Singapore is also the world's largest offshore yuan clearing hub after Hong Kong; it was chosen by China over two years ago to be the first financial centre outside its borders to offer such services. This allows banks in Singapore to settle their yuan transactions here, rather than having to go through agent banks in China or Hong Kong.
Last year alone, ICBC - the bank appointed to provide the service in Singapore - said it cleared 37.5 trillion yuan (S$8.3 trillion) in transactions, more than 14 times the 2.6 trillion yuan it cleared the year before. Total yuan deposits shot up 42 per cent to 277 billion yuan last year.
SGX is home to more than 140 S-chips - as mainland firms listed in Singapore are known - such as shipbuilders Cosco Corp and Yangzijiang, which are names which Chinese investors may be familiar with.
Still, despite the exuberance of market pundits like Mr Stoegner, all the cards are held by China. And so far, it is holding them close to its chest without giving a hint of what it plans to do next.
Sure, the Hong Kong-Shanghai connect has turned out to be a quick winner but some will say that this may be due to the big help given by China, whether by design or accident.
When the connection got off to a slow trading start last November, China's central bank made a surprise cut in interest rates - its first in more than two years - and this whetted investors' appetite as the move prodded the Shanghai stock market sharply higher.
Then just before the sudden bull run in Hong Kong in the past fortnight, China gave the go-ahead for its mainland funds to invest directly in Hong Kong - a move which may unleash billions of yuan into the former British colony's stock market.
Still, the cautious precedent set by China in using Hong Kong to test-drive the internationalisation of its currency without derailing its domestic financial system suggests that any further hook-up of its stock markets with overseas bourses would take place later rather than sooner.
In 2010, China made Hong Kong its first yuan clearing hub outside the mainland. It was not until three years later that Singapore was chosen for the same role.
Similarly, the idea of allowing mainland Chinese to directly buy overseas-listed stocks was first mooted in October 2007 but it was only in November last year - seven years later - that this became a reality.
Neither is China exactly giving unfettered permission to its citizens to buy stocks in Hong Kong or foreigners to dabble in the Shanghai stock market.
With the Hong Kong-Shanghai connect, mainland investors are permitted to trade up to HK$13.2 billion of Hong Kong shares a day. In turn, foreign investors can buy up to 13 billion yuan of Shanghai- listed firms daily.
The manner in which the connect was designed to curb exuberant cross-border money flows suggests that the Chinese may want to study the impact on its domestic financial system further before opening the door wider to international stock market participation.
It is likely that China may have other priorities, such as promoting other cities like Beijing - which aspires to be a big financial centre in its own right - when it opens up its markets to global investors. Thus, it may want Beijing to be hooked up to Hong Kong first.
Still, one thing is for sure. The huge success of the Hong Kong- Shanghai connect has put China's equities in the spotlight.
This ensures that there will be a huge fight among international financial centres jostling for China's favour to become the next stop in its outreach to the international stock markets.
Best not for Singapore to rest on its laurels and think it will be the next chosen one. London, for example, is likely to be a ferocious contender.
