Bursa Malaysia and Singapore Exchange Link

Dear Readers

It was announced recently, by Prime Minister Najib, that Bursa Malaysia and Singapore Exchange will embark in a collaboration which will see both bourses be linked.

Details of the trading link remain sketchy except for the following:

  1. The trading link will enable investors, from a respective country, to purchase financial instruments listed in the counterpart’s bourse. For example, Malaysian investors would be able to purchase shares of a Singaporean listed company though Bursa Malaysia and vice versa.
  2. The trading link will be set up by end of 2018.
  3. The clearing and settlement of foreign financial instruments can be done through a local bourse, in local currency.
  4. Cross-border supervisory and regulation will be set up jointly by Securities Commission and Monetary Authority of Singapore.

Investors are said to be the biggest winner as:

  1. Investors would be able to access 1,600 public listed companies worth more than USD1.2 trillion, in market value.
  2. The trading link would create more liquidity and activity, in both bourses.
  3. Trading costs  and  inconvenience would be lowered and minimised respectively.
  4. It is expected that there would be more cross-border research especially with regard to the small and medium cap companies.

Such a trading link is not unheard of. In 2014, Shenzhen and Hong Kong embarked in a similar scheme, namely Shenzhen – Hong Kong Connect. The said scheme was successful in achieving additional liquidity and lowering costs, with the least changes to each other’s existing regulatory system, market structure and market practices. The said connect also improved the standard of financial standards of companies listed in the Shenzhen exchange.

I would imagine that Malaysian investors would be spoilt for choice, from the many shares, derivatives and exchange-traded funds traded on SGX, once the trading link is established. Further, the trading link will encourage local companies to exercise better corporate governance and financial reporting if they intend to attract more investors from the Singaporean side. This would also be to the benefit of local investors.

Are you optimistic about the trading link? Do leave a comment.

References:
  1. http://www.mas.gov.sg/News-and-Publications/Media-Releases/2018/Malaysia-and-Singapore-to-set-up-stock-market-trading-link.aspx
  2. https://www.bloomberg.com/news/articles/2018-02-06/malaysia-singapore-agree-to-create-stock-exchange-trading-link
  3. http://www.straitstimes.com/business/companies-markets/trading-link-for-spore-malaysia-stock-exchanges-by-year-end
  4. https://www.channelnewsasia.com/news/singapore/malaysia-and-singapore-to-set-up-stock-market-trading-link-9931696
  5. https://www.hkex.com.hk/News/News-Release/2017/171203news?sc_lang=en

August 2017 Report Card

Dear Readers

With the end of August, comes September,which has always been a notoriously dreadful month for Malaysian equity.

There is always a silver lining even in a pessimistic month like September. However, to take advantage of the impending bargains, I suggest that you keep some cash lying around. About 19% of my portfolio is in cash at the moment – ready to pounce at a moment’s notice.

Bruce Plante Cartoon: The Stock Market
Credit: Bruce Plante Cartoon
What’s new?

I’ve added DNEX-WD (warrant) into my portfolio when the market was frantically disposing DNEX’s shares because of its lacklustre earnings, last quarter.

A couple of counters announced the distribution of dividends: Samchem @ 1 cents per share (30 Aug) and Airasia @ 12 cents per share (5 Sept). Rest assured, the dividends will be reinvested.

Presently, my portfolio consists of the following counters:

Airasia Bhd – 21.25% gain

CIMB Group Holdings Bhd – 31.88% gain

Dagang Nexchange Bhd WD (warrant) – 12.45% loss

Ekovest Bhd- 6.49% loss

Evergreen Fibreboard Bhd – 4.72% loss

Samchem Holding Bhd – 13.13% loss

The portfolio, despite of the losses suffered by 4 out of 6 counters, only retreated 0.3% to a 24.2% gain. You may compare August’s performance with July’s performance.

Until next time. Happy investing.

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