Lee pushes hi-tech ties with Hong Kong

At a dinner organised by the Hong Kong Policy Research Institute, Mr Lee said global capital markets had undergone structural changes, and the time-zone franchise that Asian exchanges had owned were at risk of being eroded by the extension of processing hours by dominant exchanges in other time zones.

However, he said technology-led change in the financial-services sector opened opportunities for co-operation and synergy between Hong Kong and Singapore.

"Singapore and Hong Kong, premier exchanges in the region, have a unique opportunity to work together and help spur the development of the regional capital market," he said.

"The market is big enough for both economies to thrive," he said, adding there was room for collaboration on information technology and communications.

Mr Lee said rivalry between the two cities spurred each to strive to be the best.

Mr Lee, who ruled Singapore with a firm grip for 30 years as prime minister, said despite the cities' two exchanges having responded quickly to meet the needs of Asian high-technology start-up companies, they still lacked the critical mass when compared with the Nasdaq.

"The Singapore and Hong Kong exchanges can link up trading in these boards to create greater liquidity and appeal to cross-border and regional investors," he said.