Scrapping stock trading link means a missed opportunity

Companies would have access to a larger pool of liquidity. Funding costs would be lower. The market would be more attractive for international investors.

Published Tue, Jun 12, 2018 · 09:50 PM

HAVING scrapped the high-speed rail (HSR) link with Singapore, Malaysian Prime Minister Mahathir Mohamed announced last week that he now wants to review the planned stock market trading link between the two countries, which is supposed to be operational by the end of the year.

This might end up on the back-burner. What if it does - or ends up being scrapped altogether, both of which are possible?

The trading link, first proposed in February after a retreat between Prime Minister Lee Hsien Loong and his then counterpart Najib Razak, was generally well received by the financial industry in both countries. It would give investors - including those outside Malaysia and Singapore - access to some 1,600 listed firms with a total market capitalisation of more than US$1.2 trillion (S$1.6 trillion).

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