The Singapore Exchange (SGX) announced today that it is going to sign two Memorandums of Understanding (MOUs) to strengthen its partnership with China. One agreement will be signed with Zhejiang (S) Entrepreneurs Association (ZJEA) and the other with the China Futures Association (CFA).
The MOUs are an effort to further strengthen ties with China as part of its multi-asset, international growth strategy. The agreements will be signed tonight at a gala dinner in Beijing. This is to mark the 10th anniversary of SGX’s Beijing Representative Office.
The MOU between SGX and ZJEA, a non-profit organization, aims to create a greater collaboration in developing Singapore’s capital market opportunities for China enterprises. The agreement with the CFA, on the other hand, will help develop the derivates markets in China and Singapore. This will be done through financial market education and research, renewing a partnership that was first established between the two institutions in 2013.
Commenting on the agreement, Loh Boon Chye, Chief Executive Officer of SGX, said: “we are excited about the opportunities offered with China further internationalising and the increasing role that it is playing within global capital markets.”
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“Together with our partners, we will continue to promote Singapore as a choice location for Chinese companies looking to expand their businesses internationally, as well as reinforce SGX’s role in facilitating the growing institutional investor demand for risk management tools and broader access to China.”
Singapore Enhances Cooperation with China
According to the statement, on SGX around 20 percent of listed companies and 15 percent of bond issuers are from Greater China. These listed companies have more than an S$206 billion ($149.7 billion) market capitalization and, for bond issuers, an S$294 billion outstanding amount.
The agreements announced today follow on from the Monetary Authority of Singapore (MAS) and the China Securities Regulatory Commission (CSRC) announcing last Wednesday that they have outlined a number of ways in which they plan to enhance the cooperation and financial connection between the capital markets of both countries.
The measures are the result of the third Supervisory Roundtable between the two regulators, which was held on October 24, 2018. One of the key highlights to come out of the meeting includes an agreement on a cross-border derivatives cooperation.