Singapore, Thailand launch depository receipts linkage

DEPOSITORY receipts (DRs), representing shares in a security listed on the Singapore Exchange (SGX), will be issued for trading on the Stock Exchange of Thailand (SET) and vice versa under the two exchanges' new partnership, the Thailand-Singapore DR Linkage.

The partnership is the first exchange-level DR cooperation in South-east Asia, and will bring investors "unparalleled access and efficiency to the region's growth markets", SGX said in a press statement on Wednesday.

Investors can buy and sell securities via DRs through their local broker arrangements and in their domestic currency, and the DRs will trade according to their respective home-market rules and regulations.

SGX said the partnership will advance securities market cooperation in the Asean region. The linkage also meets rising demand from market participants in both countries for more choice in their investments, which include real estate investment trusts in Singapore and fast-growing companies in Thailand.

The exchanges expect they will introduce the first DR under the linkage in the next 12 months.

SGX chief executive Loh Boon Chye said the partnership sets a blueprint for future regional collaboration and "raises Asean's profile and offers investors enhanced access with unmatched efficiency".

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He noted that it will also improve connectivity across borders as well as across multiple asset classes.

President of SET Pakorn Peetathawatchai said the linkage allows investors to conveniently diversify their portfolio in their home country, and also improves price efficiency by linking the liquidity of the two markets.

Exchanges in the region had previously attempted to link their stock markets through the Asean Trading Link, which connected Bursa Malaysia, SGX and SET. The link closed down in 2017, five years after its debut.

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