Smaller brokerages can also access S’pore stocks with deal next month

KUALA LUMPUR: Smaller brokerages in Malaysia will also be able to access Singapore stocks when the link between the two countries is signed next month.

“We should have 25 brokerages signed up for the Malaysia/Singapore /Thailand link,'' Bursa Malaysia CEO Datuk Tajuddin Atan told StarBiz.

“We will put the framework in place and see how it grows. There will be a bit more free flow between the exchanges. Earlier, there was a limited number of companies that can access the Singapore stock market; after the link is signed, smaller ones also can access these stocks.''

Representing part of the Asean collaboration, the next link to be established between Malaysia, Singapore and Thailand is targeted to be signed in August.

“The total market capitalisation of Asean is US$2 trillion while the market capitalisation of these three countries will be US$1.3 trillion.

“Different markets in Asean are at different levels of development. It will take a while for all the countries to be linked, Nevertheless, the collaboration is alive and real.''

The next step is to have an Asean marketing campaign. That will be a joint promotion where the countries would be profiling their companies and conducting research.

“Malaysia is geographically centred in a good place in Asean,'' said Tajuddin. “Among the key things, we need to be the driver in Asean and play a major role.''

The members are working on the value proposition of an Asean asset class.

Information on the 30 top counters in every country is already on an Asean exchange website showcasing these Asean stars.

It has been running since last year and is used solely for information on these top stocks.

The theme of Invest Malaysia this year is Capitalise on the Asean multinational marketplace.

Bursa will be focusing on Malaysia's economic transformation and opportunities, role as the Asean capital market driver and top companies that have evolved into multinational companies (MNCs).

Tajuddin said it might not just be incentives that would spur the capital markets. “Sometimes, we forget about intangibles, bottlenecks and structures,'' he said.

“We want to showcase our companies that have now become MNCs,'' he said. “The overseas revenue of our top 30 FBM KLCI companies now contributes nearly 40% to their revenue.

“AirAsia is all over ... Axiata gets revenue from everywhere ... Maybank, CIMB, OSK have gone regional.

“If we are not going to profile ourselves, people are going to come and say catch up.'

“We are not going to do that. I tell the chiefs of companies talk to us and we will promote you.'

“It will be a concerted effort. We will put forward the messages a few times and it will stick to people's mind,'' said Tajuddin.

The Asean collaboration is the exciting big picture.

“Asean has gone through financial crisis and worked on corporate goverance and transparency issues.”

Besides its market capitalisation of US$2 trillion (which is roughly half the size of India and China), Asean countries have a population of 600 million and gross domestic product of US$1.7 trillion.

“The population of Asean is half that of China. If we collaborate, we can let the world understand the benefits of the Asean asset class.

“As we cluster ourselves and realise that this competition is upon us, it is very clear that we need to up our game,'' he said.

However, that is easier said than done. It will involve working with other organisations in the country, looking into any areas of any overlap, the cost of business as well as other matters that will bring the exchange up further in terms of best practices.