Singaporeans Dominate New Asx Live Trading Link
Sydney Morning Herald
Friday December 21, 2001
The world's first trading alliance between Australia and Singapore went live yesterday, enabling brokers to trade directly in both markets.
Most interest came from Singapore on the first day of the electronic trading and clearing link-up, with investors making 39 trades, mainly in SingTel. In comparison, investors in Australia made only four trades.
The system allows local investors to trade 49 stocks listed on the Singapore exchange using Australian currency and the local CHESS settlement system.
In return, investors based in Singapore can trade 50 stocks listed on the Australian exchange using their own currency and settlement system.
The chief executive of the Australian Stock Exchange, Richard Humphry, declared the trading alliance a ``win-win" situation for everyone in the sharemarket.
``It's a win for the listed companies which gain access to a wider pool of investors ... for brokers who will be able to offer a wide choice of product ... and for retail and institutional investors who will gain access to a wider range of attractive investments and will able to invest offshore without leaving the comfort of their own brokers, their own regulator and their own currency."
The ASX hopes overseas stock exchanges will connect to the system to help boost Australia's presence in the global market.
``The challenge for Australia is scale. We run a very effective market in Australia but it is still only 1.3 per cent of the global market. When you look at North America, which has 54 per cent of the world market, or Europe with 30 per cent, Australia will always run the risk of being bypassed," he said.
Stock exchanges in London, Toronto, Hong Kong and San Francisco have been invited to join the co-trading link and so far the ASX has received ``pretty encouraging noises".
The ASX already has a separate one-way trading system with the US market allowing investors to trade on Wall Street.
The ASX has set a target volume of ``several hundred" trades a day with most trades expected to come from Singapore.
There are already plans to expand the system to include derivatives.
© 2001 Sydney Morning Herald