Taiwan says Singapore bourse equity-trade link to start in July

[SINGAPORE] Taiwan will open a cross-border stock trading platform with Singapore on July 1, a regulator said.

Taiwan is seeking to draw more global investors into its equity market, Financial Supervisory Commission Minister Tseng Ming-chung said in Taipei on Wednesday as he outlined the program's start date. The link follows the opening of cross- border trading between Shanghai and Hong Kong in November.

"Capital internationalization is a global trend," Tseng said at a forum. "We want to push internationalization of Taiwan's security market, starting regionally and then to countries farther away." The Taiwan and Singapore bourse operators made a pact in September to study an exchange link, with Taiwan Stock Exchange Corp. Chairman Lee Sush-der saying then that it would take about six months. Taiwan's 150 biggest stocks will be eligible for investment through the program, Michael Lin, president of the exchange operator, said in December.

Demand from mainland investors for Hong Kong shares pushed the Hang Seng Index to a seven-year high on April 13, proving that connectivity between Asian stock exchanges can boost prices, Singapore Exchange Ltd Chief Executive Officer Magnus Bocker said last week.

"The success in Hong Kong has been very beneficial to all other markets in Asia," Bocker, who leaves the bourse in June, said in an interview. "You will see more connectivity in Asia going forward."

Since the connect started on Nov. 17, foreign investors have utilized 42 per cent of the 300 billion yuan (S$65 billion) aggregate quota to pick up Shanghai-listed shares, while mainland buyers used 29 per cent of the 250 billion yuan quota for Hong Kong stocks, according to data compiled by Bloomberg.

SGX will keep the market informed of any developments in its work with Taiwan on a link, according to an e-mailed statement from the bourse on Wednesday.

Taiwan may also be about to get an influx of demand from mainland investors. The China Securities Regulatory Commission said it was studying cross-strait trading between Shanghai and Taipei, according to a Taiwan-based Economic Daily News report that cited CSRC Vice Chairman Jiang Yang.

While not ruling out a feasibility study for a link, the FSC's Tseng said Taiwan has yet to examine the matter. There are technical issues, he said, adding that allowing the Shanghai and Taiwan bourses to compile indexes based on each other's stocks would be a good starting point.

Singapore Exchange, Bursa Malaysia and the Stock Exchange of Thailand in 2012 led the formation of an equity platform connecting the Southeast Asian bourses called the Asean Trading Link.

BLOOMBERG