SGX and SZSE sign MOU to link ETF markets in Singapore and China

LOCAL bourse operator Singapore Exchange (SGX) S68 announced on Tuesday (Dec 28) that it has 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 3 decades of diplomatic ties at the upcoming 17th Joint Council for Bilateral Cooperation on Wednesday (Dec 29), co-chaired by Chinese Vice Premier Han Zheng and Deputy Prime Minister Heng Swee Keat.

Chief executive officer of SGX 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 2021, Singapore-listed ETFs crossed S$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 S$9.38, up 0.9 per cent or S$0.08 on Tuesday before the announcement was made.

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