Singapore eyes link to HK stock exchange

SINGAPORE has for the first time signalled its interest in linking the stock exchanges of the city-state and Hong Kong, reinforcing the need for closer co-operation between economies in the region.

Deputy Prime Minister Lee Hsien Loong, speaking to Singapore media while in Washington, said the Stock Exchange of Hong Kong (SEHK) was the most logical choice for the Stock Exchange of Singapore (SES) to link with.

Mr Lee is the most senior Singaporean official to endorse the link.

His comments came about 10 days after SAR Financial Secretary Donald Tsang Yam-kuen called for closer co-operation with Singapore during a visit to the island state.

Last week Mr Lee's father, Singapore Senior Minister Lee Kuan Yew, said the Hong Kong and Singapore exchanges could link trading in high-technology start-up companies to increase liquidity and appeal to cross-border regional investors.

The deputy prime minister said the link was logical because both markets were liquid, well regulated and sound.

"Well, it fits well, because if you had a link-up between Singapore and Hong Kong, then that gives you a regional base which in fact makes you a more attractive partner for the New York Stock Exchange, or Nasdaq, or a European stock exchange," he said.

Mr Lee then added that linking the Singapore bourse with Australia's was also attractive, "but if you have Singapore and Hong Kong, you've made a good start".

His comment fits well with Mr Tsang's vision of fostering closer co-operation in the region to bolster its resilience to crisis.

Mr Tsang, during a visit in Singapore 10 days ago, was quoted by the Straits Times as saying he wanted to see the emergence of a common currency in Hong Kong and Singapore in the medium term and a common Asian currency in the long run.

He had even been quoted as advocating the idea of establishing an Asian monetary union.

Mr Tsang's comment embarrassed the SAR government as it touched the taboo subject of ending Hong Kong's 17-year linked exchange rate system.

The Financial Secretary later backed away from the comments, saying he had been misquoted.

In a weekend programme on Singapore's state-run News Asia television station, Deputy Prime Minister Mr Lee said the SES was looking at a separate board for hi-tech stocks.

SES has a main board for companies with a proven history of profitability and a second board called Sesdaq for smaller firms with shorter track records.

Early last month, SES announced an easing of listing criteria to attract more hi-tech firms.

SES plans to merge with the Singapore International Monetary Exchange, the local futures exchange, on December 1.

Mr Lee said there might be adjustments to some rules and procedures for the new merged exchange after it began operations.

He said the chief executive of the merged exchange was likely to be a foreigner but the search might not be completed by December 1.

• Published in the South China Morning Post November 1, 1999.
   
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