The Securities Commission Malaysia (SC) and the Monetary Authority of Singapore (MAS) will work together to facilitate the establishment of a stock market trading link between Bursa Malaysia and the Singapore Exchange (SGX) by year-end.

SC Malaysia Chairman Ranjit Ajit Singh said the trading link would allow investors to trade and settle shares listed on each other’s stock market in a more convenient and cost-efficient manner.

“Retail investors notably will benefit from such link. This initiative follows from the ongoing efforts of the Asean Capital Markets Forum (ACMF) to deepen financial connectivity across the region's capital markets,” he told reporters at the World Capital Market Symposium 2018 in Kuala Lumpur today.

Ranjit, who is also ACMF Chairman, said the bilateral link between Bursa Malaysia and SGX would extend beyond trading to cover post-trade arrangements like the clearing and settlement of the stocks traded.

In relation to this strategic initiative, MAS and SC will set up cross-border supervisory and enforcement arrangements, and work together with the two exchanges to operationalise the link.

“The establishment of this trading link is an important step towards encouraging Asean investors to invest in Asean. The ease of accessibility for investors will contribute towards greater vibrancy in our markets.

“Once operationalised, this pilot initiative can form the basis for future connectivity among Asean markets,” he said.

Earlier, Prime Minister Najib Razak announced new measures that would be implemented to further stimulate vibrancy in the capital market.

Najib said these measures included liberalising margin financing rules to make the local market more attractive, allowing intraday short-selling to all investors, and adding a new category of traders known as 'trading specialists' who could trade on their account.

On the liberalisation of the intraday short-selling activity, Ranjit said more details would be released in a few weeks’ time.

Meanwhile, MAS Assistant Managing Director Lee Boon Ngiap said the trading link would help lower trading costs for investors and encourage greater cross-border investments in the stocks listed on each other’s exchange.

“This will improve the liquidity of both our stock markets. I hope this initiative will in time expand to include the rest of the stock exchanges in Asean,” he said.

- Bernama