According to a joint statement on July 3, 2012, the ASEAN Exchanges were still finalizing the launch date of the ASEAN Trading Link (“Link”). The initial plan had called for the connection of SGX and Bursa Malaysia in May 2012, with the Stock Exchange of Thailand joining in August 2012, and the remaining four exchanges joining shortly thereafter. Unfortunately for investors, this plan has yet to be enacted upon, and now there appears to be no definitive date for when this electronic linkage will actually commence.
The proposed Link, first detailed as part of the ASEAN Economic Community (“AEC”) Blueprint 2015, would provide an electronic linkage between seven Southeast Asian stock exchanges in six countries (Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam, including both the Hanoi and Ho Chi Minh exchanges). The Link intends to create a single access point that enables cross-border order routing and trading across the seven exchanges, rather than creating a single stock exchange.
In general, we believe investors should embrace this idea, as the Link should provide easier and wider access to invest in the region’s growth opportunities. Brokers should also benefit, with greater opportunities to trade in a cost-effective manner since they will not need a trading office in other countries to start a business there. Ultimately, however, the success of the Link will be determined by regulatory and technological challenges, such as government intervention in capital controls, online access by retail or institutional investors in the markets, the relationship between individual brokers and their own counter party brokers from another country, and the continual updating, maintenance and implementation of leading technological advances.
On top of the aforementioned challenges, the ASEAN Trading Link faces another steep obstacle: the improvement and standardization of corporate disclosure requirements across these markets. Without a smooth flow of standardized information across borders, the growth of trading flows and liquidity will not be translated into reality, even with the best technology. (“ASEAN Trading Link: Is The Promised Land a Legend or a Reality?” The Star/Asia News Network. July 9, 2012).