02 December 2010

Bursa Malaysia to take on ASEAN

Yesterday, news portal reported that Bursa Malaysia (BM) together with Singapore Stock Exchange (SGX) and Stock Exchange of Thailand (SET) are set to join the Asean Exchange Linkage which will go live by the 2nd half of 2011.

In addition to the linkage, the exchanges would also promote leading Asean public companies under the brand of "Asean Star". The cross-border offering of collective investment scheme would kicks-in after that.

Migration of local investors?
In fact, many local investors are already trading overseas shares, especially Singapore and Hong Kong markets. For them, this made no significant difference, except that the new cross-border trading will reduce the lagging time, thus, boosting the participation and matching rate. If the overhead costs of trading is reduced accordingly, investors will be more reluctant to trade. Anyway, investors can diversify more effectively to regional markets soon.

Brokers do not "broke" anymore?
Local brokers are expecting a revival of the industry, last seen in the 90s. Reportedly, all local stock broking firms would be given the green light to link with the new platform. But, brokers would need to monitor regional markets too, with more than few thousands counters!!!

What is the impact to Bursa Malaysia?
Of course, Bursa Malaysia could benefit from the cross-border trading with increase revenue generated, up-lifting the profile of local market, making it more attractive and vibrant. However, I scared local investors would in turn, shunning the local market in favor of regional markets.

Weathering the storm together...
After all, we will stick together more closely, and shoulder the good and bad times together. This is because, investors are becoming more regional, and a fall in one market would most likely going to trigger a fall in another market.

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