Singapore and Malaysian bourses to explore link-up

Southeast Asia's largest stock exchange, Singapore Exchange Ltd, said on Friday it had started preliminary talks to link up with Malaysia's bourse as ties between the neighbouring countries warm.
An electronic linkage between the Kuala Lumpur Stock Exchange and the Singapore exchange (SGX) is among the ideas being studied, a Singapore securities executive said. There's also a possibility of the Singapore bourse taking a stake in the KLSE when its Malaysian counterpart goes public, he said.
The talks, first reported by the Financial Times, are exploratory and follow a recent decision by Southeast Asian finance ministers to work toward greater integration of regional financial markets to boost foreign investment.
"Something is happening.
The talks are very preliminary but the mood between the two countries is right," the Singapore source said. The news comes as executives from regional exchanges are in Singapore for a three-day forum to look at deeper collaboration.
The link would be similar to one the SGX has with the Australian Stock Exchange that allows brokers in each country to trade electronically stocks on the other exchange.
"We are always in talks with other exchanges and that includes the KLSE," said a spokesman for the Singapore Exchange.
In December, the Singapore bourse said it was in talks about a tie-up with the Philippine Stock Exchange.
Yusli Mohamed Yusoff, the chief executive of the Kuala Lumpur exchange, told the Financial Times that officials from exchanges had been in talks.
"There's a lot of interest in closer co-operation in the region. We cannot ignore international trends. We have to protect our regional liquidity pool," he was quoted as saying in an interview.
The banking sources told Reuters there had not been any detailed meetings, and co-operation would depend on political issues as much as the immediate business needs as to whether the move was practical.
"Economically and rationally, it is such a no brainer. But like in the past, it was always politics that got in the way," the banker said.
Analysts are also cautious about a deal in the near term.
"I never had the sense that that was a major objective for them (Singapore) but then again, they are always exploring for opportunities to broaden their business with other exchanges," said David Lum, analyst at Daiwa Institute of Research.
The Malaysia and Singapore stock exchanges have had a chequered history of co-operation. For much of the 1990s, up to half the trading volume on the Singapore exchange involved over-the-counter dealing in Malaysian stocks.