Australia, Singapore And Hong Kong Consider Regional Stock Exchange

by Mary Swire, Tax-news.com, Hong Kong

19 April 2001

According to a report in the Australian Financial Review, the Australian, Singaporean and Hong Kong governments have entered into high-level talks to discuss the possibility of jointly creating a regional stock exchange and bond market.

Australia's Minister for Financial Services, Mr Joe Hockey, told the Australian Financial Review that his Government had appointed Mr Alan Cameron to work on the harmonisation of the region's financial regulation. Mr Hockey said: 'I've spoken to the Deputy Prime Minister of Singapore [Mr Lee Hsien Loong] about it. We are sending people up there to Singapore. Alan Cameron has been engaged ... with a specific brief to look towards harmonising regulation with other parts of Asia.'

The move follows the Australian Stock Exchange's (ASX) requests to introduce 'co-trading' with the Singapore Exchange to enable investors from both markets to purchase stocks in real time. Singapore's Senior Minister, Mr Lee Kuan Yew, has said he is in full favour of a regional stock market which will assist the South East Asia region in competing for global capital against China which has acquired 80 per cent of all foreign direct investment in Asia.

Not only would the creation of a regional stock and bond market strengthen economic ties between the three countries but it would create more liquidity and provide a larger platform from which it can also compete with the European and American markets. In addition companies, as members of the regional exchange, would no longer feel pressurised to list on other major markets.

The Australian government recently hosted talks with Mr Hockey's counterpart, Mr Stephen Ip, who headed a delegation from Hong Kong including officials from the Hong Kong Securities and Futures Commission and the Hong Kong Exchanges and Clearing Ltd. They discussed ways of joining forces between the financial services industries in Hong Kong and Australia, with the result of the signing of a memorandum of understanding between Hong Kong Exchanges and Clearing and the ASX.

Mr Hockey explained to the Australian Financial Review: 'Hong Kong has liquidity, and we have regulation. Singapore, in equities, has suffered considerably because of Malaysia, but this deal with the ASX to start cross-trading - and add onto that the Optus transaction - gives you the capacity to really build a substantial regional equities base, with Australia as a part of it.'

Recommended