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China, Singapore bourses to develop cross-border ETF link

SHANGHAI (CNA) – China’s Shenzhen Stock Exchange and the Singapore Exchange (SGX) have committed to setting up a cross-border link for exchange-traded funds (ETFs), the bourses said, a move designed to open up a wider range of investment options on both sides.

Under a Memorandum of Understanding (MoU) for the link, the two exchanges will jointly develop and promote ETF markets in Singapore and China through cross-border investments, the bourses said in separate statements late on Tuesday.

The MoU represents the latest step by China to open its capital markets. Earlier this month, China and Hong Kong bourses agreed to add ETFs to their stock connect schemes, and China’s securities regulator announced plans to broaden the Shanghai-London Stock Connect to include capital markets in Germany and Switzerland.

“The strong demand for ETFs in Asia underscores the region’s growing role as a global ETF hub and we are excited about the manifold opportunities that this partnership could bring,” Chief Executive Officer of SGX Loh Boon Chye said in the statement.

President and Chief Executive Officer of the Shenzhen exchange Sha Yan said the agreement will provide investors in China and Singapore with diversified, cross-border opportunities.

As at end November, Singapore-listed ETFs exceeded SGD12 billion (USD8.86 billion) in assets, up nearly 50 per cent from a year earlier, SGX said. The Shenzhen Stock Exchange currently lists 212 ETFs with a combined market capitalisation of USD39 billion.

Photo shows share prices at Shenzhen Stock Exchange in the southern Chinese city of Shenzhen in Guangdong province. PHOTO: CNA
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