malaysia – The International Investor

Thailand joins Asean Trading Link

As scheduled, Thailand joined Singapore and Malaysia on the Asean Trading Link last week. Going by news coverage and a couple of conversations I’ve had, Thai investors and brokers seem to be more enthusiastic about the project than anybody else.

That’s understandable – the historical ties between Malaysia and Singapore mean that anybody from one country who was keen to invest in the other could do so fairly easily and at reasonably low cost. But while there are brokers in Thailand who can already access other Asian markets, the link promises to make it a bit easier and cheaper for local investors there to invest in neighbouring countries – and, going the other way, also hopefully increase interest from foreign investors in Thai stocks.

Asean Exchanges link goes live

The Asean Exchanges Trading Link is one of those projects that could prove a substantial success or a damp squib – it’s impossible to tell which at this stage. But at least it’s finally under way. Last week, the trading link between Malaysia and Singapore went live and Thailand should join in mid-October, linking together around 60-70% of Southeast Asia stocks through a cross-border trading system.

The idea behind an Asean link-up is very obvious and pretty sensible. Southeast Asia has some attractive opportunities, but suffers from most local stockmarkets being relatively small. Making it easier for individual investors to trade stocks in neighbouring countries could boost liquidity, cut costs and ultimately create a semi-unified Asean capital market with a higher international profile to compete with larger emerging markets such as China and India.