Bourses in Malaysia, Singapore and Thailand are gauging investor interest in trading ETFs, structured products and Islamic bonds via the recently established Asean Trading Link.
This makes sense – the exchanges need to ensure the link evolves and with the other three countries (Indonesia, Philippines and Vietnam) unlike to join soon, they need to find ways to grow it through their own efforts.
When asked about trading volume through the link since it went live, both Bursa Malaysia and the Stock Exchange of Thailand (SET) declined to provide specifics.
However, industry players indicate that of the three bourses that joined the network, SET has seen the most significant pick-up in trading volume.
That fits with the impression that I had got from various conversations that the Thai side (both investors and the exchange) seemed to be keenest on the project.
[Fabrice] Oriol [of Sungard, which built the Asean Trading Link infrastructure] says he is seeing increasing block-trading volume going through the three exchanges that have already connected, indicating interest from institutional investors.
That would be encouraging, since one of the big reservations about the project is that institutions can already trade relatively easily in all these markets, hence activity will be limited to retail investors and volumes won’t build. If institutions are starting to use it, that gives it a better chance of long-term success.