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The PHILIPPINE STOCK EXCHANGE (PSE), together with the other ASEAN Exchanges, has entered into a memorandum of understanding (MOU) that will create a trading linkage allowing investors from the ASEAN countries to buy or sell ASEAN-listed securities through their local brokers.

The MOU was singed on February 24, 2009 during the 7th ASEAN Exchanges CEOs Meeting in Bangkok, Thailand.

“We welcome with much enthusiasm this project to set up an electronic linkage among the ASEAN Exchanges.  Not only will the project mean a more meaningful partnership with our ASEAN counterparts but it will also lay down the foundation for an integrated and harmonized ASEAN stock market,” said Mr. Francis Lim, PSE president and chief executive officer.

Mr. Lim cited the benefits of an integrated and harmonized market for securities among the ASEAN Exchanges, saying that this trading linkage will position the ASEAN as an asset class and a more attractive investment destination.

“This linkage will provide exciting opportunities for our market participants to expand their investment horizon to ASEAN markets. Once it is in place, any Filipino investor can now buy Indonesian, Malaysian, Thai and Singaporean securities with the same ease as buying Philippine securities.

Likewise, any investor based in the other ASEAN countries can buy Philippine stocks using their home brokers who will execute the trade using a counterpart local broker in the Philippines,” he said.

“The trading linkage can also provide opportunities for investors outside ASEAN to easily trade ASEAN securities.  The project is envisioned to expand the market for PSE-listed stocks and increase the business of our local brokers,” Mr. Lim added.

The ASEAN stock exchanges that are parties to the MOU were Bursa Malaysia (BM), Indonesia Stock exchange (IDX), Philippine Stock Exchange (PSE), Singapore Exchange (SGX) and the Stock Exchange of Thailand (SET).

Based on the MOU, the project will commence with the creation of an electronic linkage currently referred to as the “ASEAN Common Exchange Gateway.”  This gateway will be an entry point to be set up in each exchange for brokers and investors to trade securities listed on any of the ASEAN exchanges.

This ASEAN electronic link is expected to be launched in 2010, beginning with the Bursa Malaysia and the Stock Exchange of Thailand, followed by the Singapore Exchange and the PSE.

Mr. Lim added that these matters will be submitted to the Securities and Exchange Commission for consideration and approval at an appropriate time.

“This project is not just an integration of the ASEAN stock markets, but more importantly, it reflects our vision of taking the PSE onto the global platform of a wider investment community. With this intra-ASEAN initiative, we’re taking along with us the growth of our listed companeis, investors, market participants as well as the economy of the ASEAN countries,” Mr. Lim concluded.

SOURCE: PSE Info Matrix, Vol. 3 No. 1,  Official Newsletter of The Philippine Stock Exchange, Inc.

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