Monday, October 06, 2008 Board oks PSE participation in Asean bourse
THE Philippine Stock Exchange (PSE) has disclosed to the Securities and Exchange Commission that its board of directors has approved its participation in a trading linkage project among Asean exchanges.
Francis Lim, PSE president and chief executive officer, said that the Association of Southeast Asian Nations (Asean) stock exchange linkage is primarily a technology linkage that will allow investors from other Asean countries to buy or sell Asean-listed securities through their local brokers.
“We await with much enthusiasm to finally forge a tie-up for the Asean exchanges linkage. Not only will the project mean a more meaningful partnership with our Asean counterparts but it will also lay the foundation for an integrated and stronger Asean stock market,” Lim said.
The PSE said the urgency of developing linkages among Asean exchanges arises mainly from global pressures that could make small exchanges irrelevant in the global financial market arena. In the past years, various exchanges have been consolidating through direct buyouts, exchanges taking a stake in another or through the creation of various forms of alliances, including trading linkages.
“The trading technology linkage will be a very potent tool to minimize threats to ASEAN exchanges of being marginalized considering the relatively small size of the market capitalization of individual ASEAN stock markets. This is particularly helpful in the case of the PSE, which lags at 40th slot in terms of market capitalization compared with major exchanges globally,” Lim said.
The linkage will be done through a common exchange gateway which is a decentralized entry point to be set up in each exchange for brokers and investors to trade securities listed on any of the Asean exchanges.
Lim clarified, however, that contrary to earlier reports, the PSE has yet to enter into a memorandum of agreement with the other Asean exchanges.
The Asean stock exchanges are presently composed of Bursa Malaysia, Hochiminh Stock Exchange, Indonesia Stock Exchange, PSE, Singapore Stock Exchange and the Stock Exchange of Thailand.
Under the proposed memorandum of agreement, all participating exchanges will commit to electronically link member exchanges and set up the Asean board. (PR)
